Cello World Ltd IPO fully subscribed on Day 2
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The Rs 1900 crore Initial Public Offering of Cello World Limited was fully subscribed on the second day of bidding.
The issue received bids of 3,16,97,427 shares against the offered 2,20,61,947 equity shares, at a price band of ?617-648, according to the data available on the stock exchanges. Overall the issue was subscribed 1.44 times.
Non-Institutional Investors Portion was the most subscribed with 4.36 times, Retail and Qualified Institutional Buyer Portion was subscribed 1.04 times and 0.05 times respectively. Employee Portion was subscribed 1.26 times. The issue kicked off for subscription on Monday, October 30, 2023 and will close on Wednesday, November 1, 2023.
A day prior to the opening of the issue, Cello World Ltd had raised Rs 567 crores from anchor investors. Foreign and Domestic Institutions who participated in the anchor were ICICI Prudential, Motilal Oswal, Goldman Sachs, Nomura, SBI Life Insurance, HDFC life insurance, BNP Paribas, All Spring Global, Morgan Stanley, TATA India Consumer Fund, Quant, CLSA Global, Aditya Birla Sun Life, Edelweiss, Reliance General Insurance, Invesco, Kotak Optimus, Bajaj Alliance and others.
Leading brokerages like Nirmal Bang, SBICAP Securities, Geojit Financial Services, Reliance Securities, Choice Broking, BP Wealth, Hensex Securities, Sushil Finance, Marwadi Shares and Finance, Indsec Securities, AUM Capital, Dalal & Broacha, and Ventura Securities have given a “SUBSCRIBE” rating to the issue, highlighting Cello World's well-established brand, diversified product portfolio, strong financial performance, and growth prospects. The company's ability to cater to a wide range of consumer requirements, maintain a dominant position in the domestic consumer ware market, and leverage a large distribution network to serve diverse customer demands. Additionally, the Company's revenue and profit have shown significant growth in recent years, with a high Return on Capital Employed (ROCE).
Kotak Mahindra Capital Company Limited, ICICI Securities Limited, IIFL Securities Limited, JM Financial Limited and Motilal Oswal Investment Advisors Limited are the book running lead managers and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.
Company Information
Cello World Limited, a leading company in the consumer ware market in India with presence in the consumer houseware, writing instruments and stationery, and moulded furniture and allied products categories, and are amongst the largest brands in the Indian consumer ware market.
Founded by late Ghisulal Dhanraj Rathod, formerly the promoter and father of two current promoters, Pradeep Ghisulal Rathod and Pankaj Ghisulal Rathod, had been associated with Cello Plastic Industrial Works and the "Cello" brand since 1962.
As of June 30, 2023, the company offered a wide range of 15,891 stock-keeping units ("SKUs") spanning its various product categories. In 2017, it ventured into the glassware and opal ware business under the "Cello" brand. The company boasts an extensive product portfolio across three key categories: consumer houseware, writing instruments and stationery, and moulded furniture and related products.
The company's robust distribution network spans across the nation, supported by a sales team consisting of 721 members as of June 30, 2023. For the Consumer Houseware category, it collaborates with 717 distributors and around 58,716 retailers across India. For Writing Instruments and Stationery, it has 29 super-stockists, approximately 1,509 distributors, and roughly 60,826 retailers. In the Moulded Furniture and Allied Products category, it works with 1,067 distributors and around 6,840 retailers located throughout India.
For the fiscal year 2023, the consolidated revenue from operations increased 32.19% to Rs 1796.69 crore against Rs 1359.18 crore a year ago. Net profit increased by 29.86% from Rs 219.52 crore in fiscal 2022 to Rs 285.07 crore in fiscal 2023. It had the highest ROCE amongst the peers in FY 2021 and FY 2023 and highest EBITDA Margin for fiscal 2021, 2022 and 2023.
For the three months ended June 30, 2023, revenue from operations stood at Rs 471.78 crore and profit after tax at Rs 82.83 crore.
The table below shows subscription data for all the categories of investors:
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