After a bumper debut of the Cello World stock on bourses, several analysts now recommend investors book profit while some advise to hold the stock for the long term because of strong subscription numbers despite being entirely an offer-for-sale, decent financial figures, pan-India presence and diversified product portfolio.
The stock listed at a 28 percent premium to the IPO price. Shares opened at Rs 829 on the NSE and Rs 831 on the BSE against an issue price of Rs 648.
“The listing was above our estimate due to strong fundamentals in the company and high-growth industry dynamics,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd. Considering the change in the market momentum after the Fed meeting, Tapse believes the premium listing is justified as the brand is well-positioned in the market.
Also Read: Bumper debut | Cello World lists at Rs 831, over 28% premium to IPO price
The public issue was subscribed 38.9 times. Qualified institutional buyers (QIB) bought 108.57 times the allotted quota, high net worth individuals (HNI) picked 24.42 times and retail investors bid 3.06 times. The price band for the IPO, which opened on October 30 and closed on November 1, was fixed at Rs 617-648 per share.
Should you buy, sell or hold Cello World stock? Let's check out what the analysts say.
Mehta Equities: Hold for long term
“We strongly believe that the Cello World IPO gives allotted investors a long-term opportunity, hence recommending all allotted investors ‘hold for long term' while those who failed to get allotments can accumulate on the listing day for holding it for healthy long-term returns,” said Tapse.
StoxBox: Book profits
Cello World benefits from a distribution advantage due to its large off-take per retailer. “Retailers find it advantageous to stock Cello's products due to the comprehensive range, enabling them to fulfil diverse customer demands through a single brand,” said Parth Shah, Research Analyst, StoxBox.
At the current levels, Shah advises investors to book profits as most of the positives seem to be priced in. Investors can reconsider the company's shares at lower levels after seeing its financial performance in the medium term.
Also Read: Cello World IPO: 10 things to know
Swastika Investmart: Book profit
Despite the premium valuation, the IPO received a positive response from investors. “After such a strong listing, investors may book profit; however, those who have a long-term investment horizon can keep a stop loss at Rs 750,” said Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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