The initial public offering (IPO) of Cello World opened for subscription on Monday, allowing investors to participate from October 30 to November 1.
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The IPO is categorised as an offer-for-sale (OFS), featuring up to 2.93 crore shares without any proceeds directed to the company itself. Major stakeholders, including Pradeep Ghisulal Rathod, Pankaj Ghisulal Rathod, Gaurav Pradeep Rathod, and others, will be participating in this offer-for-sale.
Key details and GMP
The IPO presents an opportunity for potential investors to acquire shares within a price range of Rs 617-648 per equity share, with a lot size of 23 shares and multiples thereafter.
For potential investors considering this IPO, Cello World has allocated 50 per cent of the net offer to qualified institutional bidders, with 15 per cent designated for non-institutional investors. The remaining 35 per cent is reserved for retail investors.
As of today, the grey market premium (GMP) of Cello World stood at Rs 121.
Ahead of the IPO launch, Cello World successfully allocated 87,49,999 shares to 39 anchor investors at a price of Rs 648 each, amassing an impressive Rs 567 crore.
The allotment of shares for the IPO will be finalised on November 6 and the company will make its debut on Dalal Street on November 9, 2023.
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Operations and financial performance
Cello World operates 13 manufacturing units strategically positioned across five different locations in India. Furthermore, the company has strategic plans to establish a state-of-the-art glass manufacturing unit in Rajasthan, equipped with European-made machinery to bolster productivity and manufacturing capacity.
As of March 31, 2023, the company manages an impressive portfolio of 15,841 stock-keeping units (SKUs) and maintains a robust sales distribution team.
In terms of financial performance, Cello World reported a net profit of Rs 82.83 crore, accompanied by revenue totaling Rs 479.88 crore for the period ending on June 30, 2023. Additionally, for the year concluding on March 31, 2023, the company posted a net profit of Rs 285.06 crore, with revenue amounting to Rs 1,813.44 crore.
Brokerage view
Multiple prominent brokerage firms have voiced their insights on the Cello World IPO. Reliance Securities gave a ‘subscribe’ rating to the IPO and expressed bullish sentiment toward Cello World, highlighting the company’s strong brand identity and growth potential, viewing it as a promising long-term investment.
Choice Broking also gave Cello World’s IPO a ‘subscribe’ rating, citing its dominant market position and growth prospects. However, the brokerage raised concerns about overvaluation, advising investors to proceed with caution.
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StoxBox gave a ‘subscribe’ rating to the IPO as well and highlighted Cello World’s distribution advantage and superior return on capital employed (ROCE) compared to peers. The brokerage said investors could potentially benefit from listing gains.
