Bumper debut | Cello World lists at Rs 831, over 28% premium to IPO price

Cello World’s 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.

Strong subscription numbers and upbeat market momentum helped Cello World list at 28 percent premium to its issue price on November 6. The stock started trading at Rs 829 on the NSE and Rs 831 on the BSE, while its issue price was Rs 648.

Cello World’s 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.

Despite higher valuation compared to peers like Borosil and TTK Prestige, investors took a liking to the issue on back of its strong financials, debt-free status and big anchor names like Nomura, Morgan Stanley and Goldman Sachs.

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The Mumbai-based firm raised Rs 1,900 crore via a maiden public issue that comprised only an offer-for-sale (OFS) by the promoters. Since the offer did not have a fresh issue component, all the money, excluding issue expenses went to the promoters.

Cello World has a strong presence in consumer houseware, writing instruments and stationery, moulded furniture and allied products and consumer glassware categories. The firm, which offered 15,891 stock-keeping units (SKUs) across its product categories as of June 2023, operates 13 manufacturing facilities across five locations and is setting up a glassware manufacturing facility in Rajasthan.

Cello World's net profit in FY23 was up 30.5 percent on-year at Rs 266.1 crore, with revenue rising 32.2 percent to Rs 1,796.7 crore. Both grew at a CAGR of 30 percent during FY21-FY23.

During the same period, its earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 26 percent YoY to Rs 420.54 crore. The margin, however, fell 110 basis points (bps) to 23.4 percent.