Rs 10,337.40 crore order book: EPC company’s Board approved Rs 50 crore convertible ICD to C & C Constructions Ltd; Invest up to Rs 19.37 crore for 74% SPV

A Board meeting of Ceigall India Limited approved a significant change in its financial strategy regarding C & C Constructions Limited (CCCL). The company, on the recommendation of its Audit Committee and legal counsel, has shifted from a proposed merger with its wholly-owned subsidiary, Ceigall Infra Projects Private Limited (CIPPL), and CCCL. Instead, it has approved a new plan: to lend Rs 50 crore to CCCL as a convertible loan in the form of an Inter-Corporate Deposit (ICD). This move is intended to provide financial assistance for CCCL's revival, as it is currently under liquidation, and to subsequently acquire its equity shares upon approval from the NCLT.

The new agreement details a secured loan of Rs 50 crore to be provided to CCCL. This loan, secured by a deposit of property title deeds, is part of a larger plan where Ceigall India Limited is expected to initially hold up to 94 per cent of CCCL's shareholding after NCLT approval. The company will eventually reduce its stake to 75% to comply with SEBI regulations and the IBC Code. The company clarified that this is a related party transaction between a holding company and a proposed subsidiary, not with any interested directors or key managerial personnel.

In addition to the financial assistance for CCCL, the Board also approved investments in Ceigall Southern Ludhiana Bypass Private Limited, a Special Purpose Vehicle (SPV). Ceigall India Limited will provide security for a rupee term loan and invest up to Rs 19.37 crore in the SPV's share capital to finance a six-lane bypass project in Punjab. This investment will give Ceigall India Limited a 74 per cent shareholding in the SPV. The company also announced that the trading window for its securities will reopen on September 22, 2025, for all designated persons.

About the Company

Established in 2002, Ceigall India Limited stands as an infrastructure construction company with a strong focus on specialised structural projects. Their expertise encompasses the construction of vital transportation infrastructure, including elevated roads, flyovers, bridges, railway overpasses, tunnels, highways, expressways, and runways. Beyond new construction, Ceigall also undertakes the maintenance of state and national highways, demonstrating a comprehensive approach to infrastructure development and upkeep.

In its annual results, the net sales increased by 13.5 per cent to Rs 3,437 crore while net profit decreased by 5.6 per cent to Rs 287 crore in FY25 compared to FY24. The company has a market cap of over Rs 4,800 crore and the order book stands at Rs 10,337.40 crore. The shares of the company have a PE of 16x, an ROE of 21 per cent and an ROCE of 22 per cent. The stock is up by 22.3 per cent from its 52-week low of Rs 229 per share and down 29.6 per cent from its 52-week high of Rs 425 per share.

Disclaimer: The article is for informational purposes only and not investment advice.