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Cello World Limited IPO: Crafting the Future of Everyday Essentials
Introduction:
Cello World Limited IPO, a monumental offer for sale amounting to Rs 1,900.00 crores, symbolizes a transition in the landscape of consumer housewares, writing instruments, stationery products, molded furniture, and beyond. The IPO bidding window opened on October 30, 2023, concluding on November 1, 2023. The allotment process was finalized swiftly on Thursday, November 2, 2023. Subsequently, the stocks made a grand entry onto both BSE and NSE on November 6, 2023.
Financial Snapshot:
The IPO set a price band of ₹617 to ₹648 per share, with a minimum lot size of 23 shares. Retail investors entered the fray with a minimum investment of ₹14,904. HNIs, both small (sNII) and big (bNII), were required to commit to 14 lots (322 shares) and 68 lots (1,564 shares), respectively.
Market Performance Snapshot:
As of December 20, 2023, the stock was marked at ₹762.40, witnessing a 3.20% dip. The opening and closing values stood at ₹794.00 and ₹760.00, respectively. The 52-week range showcased a high of ₹837.40 and a low of ₹772.00.
Key IPO Statistics:
- - IPO duration: October 30, 2023, to November 1, 2023
- - Listing Date: November 6, 2023
- - Face Value: ₹5 per share
- - Price Band: ₹617 to ₹648 per share
- - Lot Size: 23 Shares
- - Total Issue Size: 29,320,987 shares, aggregating up to ₹1,900.00 Cr
- - Offer for Sale: 29,320,987 shares of ₹5, aggregating up to ₹1,900.00 Cr
- - Employee Discount: Rs 61 per share
- - Issue Type: Book Built Issue IPO
- - Listing At: BSE, NSE
Equity Dynamics:
Before the issue, Cello World Limited held 212,231,034 shares, a figure that remained unchanged post the IPO.
IPO Reservation Strategy:
The IPO allocation strategy encompassed a diverse set of stakeholders: 19.88% to QIBs, 14.91% to HNIs, 34.80% to retail investors, 0.58% reserved for employees, and a significant 29.83% to Anchor investors. Retail investors were further categorized into those with bids below ₹10L (sNII) and those above ₹10L (bNII).
Anchor Investor Insight:
The IPO garnered substantial attention from anchor investors, with a bid date of October 27, 2023. The anchor portion size stood at ₹567.00 crores, comprising 8,749,999 shares. A 50% lock-in period for these shares concludes on December 18, 2023, while the remaining shares are subject to a 90-day lock-in period ending on March 12, 2024.
IPO Timeline Highlights:
- - IPO Open Date: Monday, October 30, 2023
- - IPO Close Date: Wednesday, November 1, 2023
- - Basis of Allotment: Thursday, November 2, 2023
- - Initiation of Refunds: Thursday, November 2, 2023
- - Credit of Shares to Demat: Friday, November 3, 2023
- - Listing Date: Monday, November 6, 2023
- - Cut-off time for UPI mandate confirmation: 5 PM on November 1, 2023
Lot Size Landscape:
Investors had the flexibility to bid for a minimum of 23 shares and in multiples thereof. The table below delineates the investment parameters for retail investors and HNIs:
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (Min) | 1 | 23 | ₹14,904 |
| Retail (Max) | 13 | 299 | ₹193,752 |
| S-HNI (Min) | 14 | 322 | ₹208,656 |
| S-HNI (Max) | 67 | 1,541 | ₹998,568 |
| B-HNI (Min) | 68 | 1,564 | ₹1,013,472 |
Promoter Holdings Perspective:
The Promoters of Cello World Limited, namely Pradeep Ghisulal Rathod, Pankaj Ghisulal Rathod, and Gaurav Pradeep Rathod, held 91.8% of shares pre-issue, which decreased to 78.06% post the IPO.
Company Overview:
Incorporated in 1962, Cello World Limited stands tall as a manufacturer of consumer housewares, writing instruments, stationery products, molded furniture, and an extensive array of related products. The company boasts two household brands, "Cello" and "Unomax," representing quality and innovation.
Cello World operates 13 manufacturing units across five locations in India, aiming to establish a glass manufacturing unit in Rajasthan. The Consumer Houseware division boasts 717 distributors and around 58,716 retailers. The Writing Instruments and Stationery division extends its reach through 29 super-stockists, approximately 1,509 distributors, and approximately 60,826 retailers. The Molded Furniture and Allied Products division has 1,067 distributors and around 6,840 retailers.
As of March 31, 2023, the company manages an impressive stock-keeping unit (SKU) count of 15,841 across all product ranges. The national sales distribution team comprises 683 members.
Financial Performance Snapshot:
As of June 30, 2023:
- - Assets: ₹1,686.05 Crores
- - Revenue: ₹479.88 Crores
- - Profit After Tax: ₹82.83 Crores
- - Net Worth: ₹1,226.56 Crores
- - Reserves and Surplus: ₹149.61 Crores
- - Total Borrowings: ₹328.64 Crores
Key Financial Indicators:
- - P/E (x): 41.51
- - Market Cap: ₹13752.57 Crores
- - ROE: 39.9%
- - ROCE: 44.48%
- - Debt/Equity: 0.62
- - EPS (Rs): 13.65
- - RoNW: 23.17%
Objects of the Issue:
Notably, the company will not receive any proceeds from the offer.
Expert Analysis:
Cello World Limited, with its brands "Cello" and "Unomax," has shown consistent growth. However, the IPO is perceived as fully priced, and investors are advised to consider it cautiously, especially given the current market dynamics.
IPO Subscription Status:
As of November 1, 2023, the Cello World Limited IPO witnessed a robust subscription of 41.69 times. The retail category saw a subscription of 3.21 times, while the NII and QIB categories were oversubscribed 25.65 times and 122.20 times, respectively. The total number of applications reached 1,316,828, reflecting a subscription of 2.97 times.
Note: All financial figures are in INR (Indian Rupees), and market-related data is as of December 20, 2023.
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