Cello World IPO: Issue Opens on October 30, Aims to Raise Rs 1900 Crore
Cello World IPO
Cello World, a renowned consumer-ware company, is poised to make its mark in the financial market as it prepares to launch its Initial Public Offering (IPO) for subscription on October 30, 2023.
With ambitious plans to raise Rs 1900 crore, this IPO represents a significant financial milestone for the company and a promising opportunity for investors.
This comprehensive article will delve deeper into the various facets of the Cello World IPO, offering a detailed insight into the company’s history, its financial performance, and the specific details of the IPO.
Cello World IPO: A Promising Opportunity
The IPO of Cello World is generating substantial interest in the investment community. This consumer-ware company, headquartered in Mumbai, has decided to open its IPO for subscription on October 30, 2023.
The company is looking to raise an impressive Rs 1900 crore through this IPO. This presents an enticing investment opportunity for those who believe in the potential of the company.
Offer for Sale (OFS): A Distinct Approach
Cello World’s IPO is unique in that it is entirely based on Offer for Sale (OFS). In this approach, the company’s promoters, the Rathore family, will be the beneficiaries of the IPO proceeds.
This means that the funds raised from the IPO will not be used to fuel the company’s growth directly but will rather provide liquidity for the promoters. It’s a distinctive approach that sets Cello World’s IPO apart from others in the market.
Subscription Period and Allotment: Key Dates
The subscription period for the Cello World IPO is set to run from October 30 to November 1, providing potential investors with a window to participate in this offering.
Allotment of shares is expected to take place by November 6, and successful investors can anticipate the shares being credited to their demat accounts by November 8.
The stock is scheduled to be listed on both the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) on November 9, marking the entry of Cello World into the stock market.
Merchant Bankers and Registrar
A successful IPO is often underpinned by the expertise of merchant bankers, and Cello World’s offering is no exception. The merchant bankers overseeing this IPO are well-established in the financial industry.
Kotak Mahindra Capital Company, ICICI Securities, IIFL Securities, JM Financial, and Motilal Oswal Investment Advisors are entrusted with the responsibility of managing the IPO process.
Additionally, Intime India Registrar is facilitating the link between the company and its investors, ensuring a smooth and efficient IPO journey.
IPO Allocation Strategy
Cello World has adopted a strategic allocation approach for its IPO. The company has reserved 50% of the issue size for qualified institutional buyers (QIBs), aiming to attract institutional investors who can bring stability and depth to the company’s shareholding.
Furthermore, 15% of the issue is earmarked for high net worth individuals (HNIs), catering to those with significant financial capacity.
This allocation strategy is designed to ensure a well-rounded investor base. The remaining 35% of the issue is allocated for retail investors, allowing the broader public to participate in Cello World’s growth.
Cello World: A Diverse Product Portfolio
To understand Cello World’s potential as an investment, it’s essential to explore the company’s diverse business segments. Cello World operates in consumer housewares, writing instruments and stationery, molded furniture and products, and consumer glassware categories.
This broad portfolio encompasses 15,891 stock-keeping units (SKUs) across various product categories as of June 2023.
The company’s diverse product range is a testament to its ability to cater to a wide consumer base, meeting their needs across different segments.
Whether it’s household items, writing instruments, or glassware, Cello World has established itself as a reliable and versatile brand.
Manufacturing Excellence and Expansion
Cello World’s operational strength lies in its manufacturing capabilities. The company proudly operates 13 manufacturing facilities across five different locations, ensuring efficient and timely production.
Moreover, the company is in the process of establishing a glassware manufacturing facility in Rajasthan, which reflects its commitment to innovation and growth.
Approximately 80% of Cello World’s revenues come from in-house manufacturing operations, indicating a high level of self-reliance and control over product quality.
The remaining portion of its products, primarily steel and glassware items, is sourced from third-party contract manufacturers. This hybrid approach allows Cello World to maintain flexibility in its product offerings.
Financial Performance: A Closer Look
One of the critical aspects of evaluating any IPO is the financial performance of the company. In the case of Cello World, its financial performance has been commendable, with a few notable highlights and some areas of improvement.
FY23: Impressive Growth
In the fiscal year 2023, Cello World reported a net profit of Rs 266.1 crore, reflecting a substantial 30.5% year-on-year increase.
This noteworthy growth in profitability is indicative of the company’s ability to expand its bottom line. Furthermore, the revenue during this period surged by 32.2% to reach Rs 1,796.7 crore.
This increase in revenue underscores the company’s strong market presence and its ability to cater to consumer demands effectively.
EBITDA Margin Decline
Despite the remarkable revenue and profit growth, Cello World did experience a slight dip in its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin.
The EBITDA margin declined by 110 basis points (bps) to 23.4%. This margin reduction, while worth noting, does not necessarily overshadow the company’s overall financial performance.
Q1 FY24: A Positive Start
The performance of Cello World in the first quarter of the fiscal year 2024 continues to be robust. During this period, the company reported a net profit of Rs 77.4 crore, representing a substantial 25.2% year-on-year increase.
The revenue during the same period also exhibited growth, rising by 9% to reach Rs 471.8 crore. This data indicates that Cello World is maintaining its momentum and continues to make strides in terms of profitability.
The EBITDA performance in the first quarter of FY24 is another positive highlight. The EBITDA increased by 23% to reach Rs 119.2 crore, reflecting a strong operational performance.
Additionally, the EBITDA margin expanded by 290 bps over the previous year, reaching 25.3%. This margin expansion is a testament to the company’s efforts in enhancing operational efficiency.
Conclusion: Cello World’s IPO Prospects
The Cello World IPO represents an exciting opportunity for investors looking to be part of a well-established company with a diverse product portfolio and a strong financial track record.
With a significant presence in various consumer categories, Cello World has showcased robust growth in its financial performance, marked by impressive revenue and profit figures.
While the slight decline in EBITDA margin in FY23 is a point of consideration, the positive trends observed in the first quarter of FY24, with both net profit and EBITDA margin expanding, underscore the company’s ability to adapt and thrive in a competitive market.
Investors have the chance to participate in Cello World’s journey as it enters the stock market. The allocation strategy, with provisions for QIBs, HNIs, and retail investors, aims to create a diverse and stable investor base.
The company’s commitment to manufacturing excellence, including the expansion of manufacturing facilities, further indicates its growth-oriented approach.
The merchant bankers overseeing the IPO process are reputable and experienced, providing confidence to investors regarding the smooth and efficient execution of the IPO.
Overall, the Cello World IPO is a compelling offering in the consumer-ware segment. It combines a well-established brand with a diverse product portfolio, strong financial performance, and a unique
Offer for Sale (OFS) structure. Investors looking for exposure to a company with growth potential in consumer-oriented segments may find the Cello World IPO an attractive proposition.
As with any investment decision, it’s important for potential investors to conduct their due diligence and consult with financial advisors to make informed choices in line with their financial goals and risk tolerance.
