Ceigall India IPO: Mixed Investor Response on Final Bidding Day

The initial public offering (IPO) for Ceigall India Limited has generated a mixed response from investors as the bidding period comes to a close today. The IPO, which opened on August 1, 2024, had a price band set between ₹380 and ₹401 per share, aiming to raise a total of ₹1,252.66 crore.

As of now, the subscription numbers have shown a significant uptick. By early afternoon on the third day, the overall issue was subscribed 3.48 times, with retail investors particularly active, subscribing to 7.12 times their portion. The shares being offered include both fresh equity and an offer-for-sale component.

Ceigall India specializes in infrastructure construction, focusing on projects like elevated roads, flyovers, and highways. It’s completed over 34 road and highway projects to date, establishing itself as a notable player in the market.

The grey market premium for Ceigall India shares has seen a decline, dropping to ₹25, which signals a modest expectation for profit when the stocks list. This is a stark contrast to the previous day, when the premium was higher at around ₹53.

Analysts generally remain positive about the IPO, advising investors to subscribe for long-term gains. They cite strong revenue growth, a solid order book, and an impressive track record in project execution as key strengths of the company.

However, some caution is advised, as concerns over increasing debt levels and stretched valuations loom. Many brokerage firms are currently recommending a ‘subscribe’ rating, but with caution.

Ceigall India has also made provisions for its eligible employees by reserving shares worth ₹2 crore, along with a discount of ₹38 per share during the bidding process. The IPO is expected to list on both BSE and NSE on August 8, 2024, following the T+3 listing rule.