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6 October 2023

Cellecor Gadgets IPO: Innovating in the World of Electronic Gadgets

Introduction:

Cellecor Gadgets Limited, established in 2020, is an emerging player in the electronic gadgets industry. The company recently entered the world of Initial Public Offerings (IPOs) with the aim of raising capital for its expansion plans.

IPO Snapshot:

The Cellecor Gadgets IPO was valued at Rs 50.77 crores, exclusively through a fresh issue of 55.19 lakh shares. The IPO bidding window was open from September 15, 2023, to September 20, 2023, with allotments finalized on September 25, 2023. Cellecor Gadgets shares were listed on NSE SME on September 28, 2023. The IPO price band was set at ₹87 to ₹92 per share, with a minimum lot size of 1200 shares, necessitating a minimum investment of ₹110,400 for retail investors.

Key Market Players:

Narnolia Financial Services Ltd served as the book running lead manager of the Cellecor Gadgets IPO, while Skyline Financial Services Private Ltd acted as the registrar for the issue. Market makers for the IPO were Ss Corporate Securities and Kantilal Chhaganlal Securities.

Stock Performance:

As of October 6, 2023, Cellecor Gadgets Limited's stock was trading at ₹123.15, marking a robust 4.99% increase. The stock opened at ₹123.15 and maintained a stable trading range. The previous closing price was ₹117.30, with a total traded value of 70,800 shares.

Ownership Structure:

Pre-issue, the shareholding was at 69.95%, which subsequently decreased to 51.54% post-issue, reflecting adjustments in the company's equity structure.

Financial Insights:

Cellecor Gadgets displayed impressive financial performance. As of March 31, 2023, the company's assets surged to ₹7,002.52 lakhs, largely attributed to substantial revenue of ₹26,436.56 lakhs, a significant increase compared to the previous years. The company reported a profit after tax of ₹797.07 lakhs, indicating a healthy turnaround from prior losses. The net worth increased to ₹1,381.26 lakhs, with reserves and surplus standing at ₹1,369.94 lakhs. Total borrowing amounted to ₹2,084.38 lakhs.

Market Indicators:

Key performance indicators included a Market Capitalization of ₹192.9 crores, a Price-to-Earnings (P/E) ratio of 13.45, and a Return on Equity (ROE) of 57.71%.

Objectives of the Issue:

The net proceeds from the IPO were intended for several purposes, including:

1. Meeting working capital requirements.
2. Funding general corporate purposes.
3. Covering issue-related expenses.

Expert Opinion:

Highlighted that the company is currently involved in trading electronic products and does not possess its own manufacturing unit. While its performance for FY22 and FY23 was exceptional, questions arose regarding the sustainability of such growth. Based on the extraordinary earnings of FY23, the issue appeared to be fully priced. He suggested that well-informed, cash-surplus, and risk-seeking investors might consider investing in this IPO.

Subscription Status:

The Cellecor Gadgets IPO attracted substantial interest from investors, with an overall subscription rate of 116.33 times as of September 20, 2023. Retail investors exhibited remarkable enthusiasm, with a subscription rate of 124.08 times, while the Non-Institutional Investors (NII) category garnered an impressive subscription rate of 176.54 times.

Conclusion:

Cellecor Gadgets Limited's IPO reflects its entrance into the public market, showcasing its potential in the electronic gadgets industry. Potential investors should conduct comprehensive research into the company's financial stability, growth prospects, and competitive landscape before making investment decisions. As with any investment, prudent risk management and diversification are essential strategies when considering IPO opportunities in the ever-evolving world of electronic gadgets.

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