Cello World's ₹1,900-crore initial public offering (IPO) will open for subscription on Monday, October 30. The issue will conclude on Wednesday (November 1).

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Ahead of the IPO opening, shares of Cello World are commanding a healthy premium of Rs 120 in the unlisted market.

It is important to note that grey market premiums are just an indicator as to how the company's shares are stacked up in the unlisted market and are subject to change rapidly.

The Mumbai-based consumer-ware company has mopped up Rs 567 crore from 39 anchor investors including Goldman Sachs, Nomura, Morgan Stanley, SBI Life, among others.

Price band, other details

Cello World has priced its IPO in the range of ₹617-648, and it aims to raise about ₹1900 crore considering the upper end of the price band.

Investors can bid for a minimum of 23 equity shares and in multiples thereafter.

The issue is a complete offer for sale (OFS) worth Rs 1,900 crore by promoters and other selling shareholders, with no fresh issue of equity share component.

Under the OFS, promoters Pradeep Ghisulal, Pankaj Ghisulal Gaurav Pradeep and selling shareholders Samgeeta Pradeep, Bibita Pankaj, Ruchi Gaurav Rathod will offload their partial stakes in the firm.

The offer includes a reservation of shares worth up to ₹10 crore for subscription by eligible employees. Also, 50% will be available for allocation on a proportionate basis to qualified institutional buyers, 15% for non-institutional investors and the rest 35% for retail investors.

The net proceeds from the issue will entirely go to the selling shareholders.

Key concerns

- Raw material price fluctuations pose risks to their operations.

- Dependency on third-party contract manufacturers primarily located in China.

- Risk of 100% OFS.

About the company

Cello World is a consumer product company mainly dealing in three categories such as writing instruments and stationery, molded furniture, consumer housewares and related products.

Cello World has 13 manufacturing units situated in five different locations in India. The company also aims to set up a glass manufacturing unit in Rajasthan with European made machinery to enable efficient productivity and enhanced manufacturing capacity.

The company has nationwide sales and distribution network, which is supported by their 721 members sales team, as of June 30, 2023.

Besides, Cello World's net profit rose 30% to ₹285 crore in FY23 from ₹219.52 crore in the preceding fiscal.

Kotak Mahindra Capital Company, ICICI Securities, IIFL Securities, JM Financial and Motilal Oswal Investment Advisors are book-running lead managers to the issue, while KFin Technologies is the registrar.

The equity shares of the company are proposed to be listed on both the BSE and the NSE.

First Published:Oct 29, 2023 7:29 PM IST