Cello World to soon launch QIP to raise up to Rs 800 crore

Cello World’s shares have risen by 36 percent since its listing in November to Rs 880.80 per share as on Friday, June 28

ICICI Ventures-backed houseware products maker Cello World Limited will soon hit the market with a Rs 800-crore qualified institutional placement (QIP) offering, sources aware of the company’s plans told Moneycontrol.

The fundraising effort comes just eight months after the company listed on the stock exchanges following a Rs 1,900-crore initial public offering (IPO), which saw the company’s promoters and investors sell their shares in a pure offer for sale. ICICI Ventures invested Rs 360 crore in Cello World in November 2022.

Cello World’s shares have risen by 36 percent since its listing in November to Rs 880.80 per share as on Friday, June 28. The company had sold its shares in the IPO at Rs 648 apiece.

“The QIP work is in advanced stages and the deal is likely to be launched in the coming couple of weeks. A few investment banks such as Motilal Oswal, JM Financial and Kotak are working on the share sale,” said one of the persons mentioned above.

The company plans to use the funds for various purposes including repayment of debt, capital expenditure to augment its manufacturing facilities, funding its growth plans as well as for working capital requirements.

A source added that one of the other important reasons for the QIP is to bring down the promoter stake in the company to 75 percent to meet Securities and Exchange Board of India (SEBI) minimum public shareholding norms. Under these norms all newly listed companies need to achieve a minimum public shareholding of 25 percent in three years from listing.

Promoters of Cello World currently hold a 78 percent stake in the company. Shareholders of the company had approved the QIP fundraise on June 26 in an extra-ordinary general meeting.

A message sent to Cello World chairman and managing director Pradeep Rathod had not elicited a response till the time of publishing this article.

For the fiscal year ended March 31, 2024, the company reported a revenue of Rs 2,000 crore, a growth of 11 percent over the previous fiscal. Earnings before interest, taxes, depreciation and amortisation grew 22 percent to Rs 535 crore while profit rose 24 percent to Rs 334 crore.

The company derived 66.2 percent of its revenue from consumerware products, 16.7 percent from writing products and the rest from moulded furniture and allied products.