Cello World IPO listing: Cello World, a Mumbai-based consumer products company specializing in glassware, opalware, melamine, and porcelain, made a strong debut on Dalal Street on Monday, November 6.
Cello World IPO listing: Cello World, a Mumbai-based consumer products company specializing in glassware, opalware, melamine, and porcelain, made a strong debut on Dalal Street on Monday, November 6.The company’s shares opened at Rs 831 on the BSE, representing a substantial premium of Rs 183 or 28.2% over the upper end of the issue price range, which was Rs 617-648 per share.
On the NSE, Cello World commenced trading at Rs 829 per share, marking a premium of Rs 181 or 27.9%.
Following its initial surge, the stock experienced a minor pullback. By 10:07 am, Cello World shares were trading at Rs 792.5 on the BSE and Rs 791.9 on the NSE, maintaining a premium of approximately 22%.
Cello World’s IPO, involving the issuance of fresh shares amounting to Rs 1,900 crore, garnered strong investor interest, with a subscription rate of 38.9 times the available equity.
Editor’s Opinion | Consider Holding Cello World Shares with a Stop Loss at Rs 775 Zee Business Managing Editor Anil Singhvi, who had earlier recommended subscribing to the IPO for potential listing gains and long-term benefits, advises investors to maintain their positions with a stop loss at Rs 775. He had anticipated that Cello World’s stock would debut within the Rs 825-850 range, representing a premium of up to 31.2%.
Key Details About Cello World IPO The Cello World IPO opened for subscription on October 30 and concluded on November 1. During the public offering, shares were available for bidding within a price range of Rs 617-648 per share in multiples of 23 shares, equating to Rs 14,191-14,904 per lot.
The allocation of shares was divided, with 50% reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors and high net-worth individuals, and the remaining 35% for retail individual investors.
Numerous analysts had recommended subscribing to the IPO. Despite its relatively high valuation at 48.8 times earnings per share (EPS) over the trailing 12 months, compared to an industry average price-to-earnings ratio of 43.5 times, Nirmal Bang remained positive about the company’s potential for growth across its three business segments. The company had experienced a 30% increase in its top-line revenue between FY21 and FY23. It demonstrated healthy growth in its writing instruments and stationary segment, achieving approximately 23% operating margins, outperforming industry peers. Furthermore, it aimed to expand its pan-India distribution network from 1,550 to 2,500 distributors.
In the opalware segment, Cello World maintained a solid 28% operating profit, with expectations of sustained margins over the next three years. Although the delayed festive season had affected second-quarter growth, it was anticipated to catch up with demand in H2FY24. The company’s impressive return ratios, with RoE at 49.6% and RoCE at 44.9%, surpassed industry benchmarks, making it an attractive investment opportunity.