Shares of Cello World Ltd made a strong debut on Monday as the consumer ware player was listed at Rs 831; Should you Hold or book profits?
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Shares of Cello World Ltd made a strong debut at Dalal Street on Monday as the consumer ware player was listed at Rs 831, a premium of 28 per cent, over its issue price of Rs 648 on the BSE. On the NSE, the shares of Cello World debuted at Rs 829, up 27.9 per cent over its issue price.
Cello World raised a total of 1,900 crore via its initial stake sale, which was entirely an offer-for-sale (OFS) up to 2.93 crore by its promoters and other selling shareholders. The company sold its shares in the range of Rs 617-648 apiece with a lot size of 23 equity shares between October 30 and November 1.
During the three-day bidding process, the issue garnered a robust overall subscription rate of 38.9 times. Notably, the qualified institutional bidders (QIBs) oversubscribed their allotted quota by a staggering 108.57 times, while non-institutional investors also displayed strong interest with a subscription rate of 24.42 times.
Retail investors and employees subscribed to their respective allocations at rates of 3.06 times and 2.60 times.
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Cello World is a well-known pan-India consumer product company. It mainly deals in three categories- writing instruments and stationery, molded furniture, consumer housewares. Cello World has an experience of more than six decades in the field of consumer product industry. It has 13 manufacturing units situated in 5 different locations in India.
Kotak Mahindra Capital Company, ICICI Securities, IIFL Securities, JM Financial and Motilal Oswal Investment Advisors were the book running lead managers, while Link Intime India was the registrar for the issue.
Listing on Cello Price has been in-line/better than expected as signaled by the grey market premium. Ahead of listing, Cello World was commanding a premium of Rs 160 apiece in the unofficial market, signaling a listing pop of 25 per cent over the given issue price. The grey market premium has remained stable since the closure of the issue.
What Should Investors Do Now?
Shivani Nyati, Head of Wealth, Swastika Investmart Ltd, said, “Despite the premium valuation, the IPO received a positive response from investors. This is likely due to the company’s strong brand recognition, diversified product portfolio, and pan-India presence.”
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“After such a strong listing, investors may book profit; however, those who have a long-term investment horizon can keep a stop loss at 750,” Nyati added.
