Consumer goods company Cello World’s initial public offer (IPO) was subscribed 38% on the first day, with the non-institutional investor (NII) portion almost fully subscribed and the retail portion at 35%. The IPO, which opened on October 30 and will close on November 1, aims to raise up to ₹1,900 crore through a complete offer for sale.
Cello World, a manufacturer, distributor, and seller of various consumer goods such as drinkware, insulated ware, dinnerware, serveware, and glassware, has a dominant market position in India. Its wide range of products and large off-take per retailer provide a distribution advantage. A report by BP Equities states that retailers prefer stocking Cello’s products due to the comprehensive range, allowing them to meet diverse customer demands through a single brand.
However, the company faces risks such as fluctuations in raw material prices, especially plastic granules and polymer prices, as well as potential supply chain issues. It also doesn’t hold trademarks for its key brands, such as ‘Cello’, ‘Unomax’, ‘Kleeno’, and ‘Puro’. Another competitor also uses the ‘Cello’ brand name for its writing instruments business. Any adverse impact on Cello’s brand name due to competitors’ actions may negatively affect its reputation and business. The company’s margins and profitability depend on maintaining its existing capacity utilization rate.
Despite these risks, a report by Geojit highlights the growth opportunities in the branded consumerware market in India. Factors such as consumer awareness towards safety and quality, shorter replacement cycles, the increasing focus on product aesthetics, loyalty to established brands, rising disposable income, and changes in family structures contribute to the market’s growth. Geojit gives Cello World a ‘Subscribe’ rating for the IPO on a long-term basis.
Choice Broking also recognizes Cello World’s dominant market position and growth potential. However, they assign a ‘Subscribe with Caution’ rating for the IPO due to its high pricing.
In terms of subscription, the IPO received bids from non-institutional investors, while retail investors showed fair demand. The IPO is scheduled to close on November 1. The price band is set at ₹617 to ₹648, and investors can bid for a minimum of 23 shares and in multiples thereof.
Before the IPO, Cello World raised ₹567 crore from anchor investors. It is important to note that the IPO is solely an offer for sale, and the company will not receive any proceeds from it.
Source: BSE
Related Articles:
– Wine vs Tea: India’s consumption trends show a sharp divergence
– This FMCG scion is all set to gain a windfall from Honasa Consumer IPO
I have over 10 years of experience in the cryptocurrency industry and I have been on the list of the top authors on LinkedIn for the past 5 years. I have a wealth of knowledge to share with my readers, and my goal is to help them navigate the ever-changing world of cryptocurrencies.
