- The issue received very good interest from institutional buyers.
- The IPO is a complete offer for sale where no proceeds will go to the company.
The initial public offer (IPO) of consumer goods company Cello World was subscribed almost 39 times the shares on offer, on the last day of the issue.
Qualified Institutional Buyers (QIBs) bid aggressively for the issue as this portion was subscribed 108 times as of Wednesday evening. The non-institutional investor (NII) portion was subscribed 24 times. Its retail portion was subscribed thrice over.
The price band has been fixed at ₹617 to ₹648, and investors can bid for a minimum of 23 shares and in multiples thereof. It aims to raise as much as ₹1,900 crore via the public issue.
The company has raised ₹567 crore from anchor investors ahead of the IPO, on Friday. The IPO is a complete offer for sale wherein no proceeds from it will go to the company.
| Type of investor | No of times subscribed |
| Qualified Institutional Buyers | 108.57 |
| Non-institutional Investors | 24.42 |
| Retail | 3.06 |
| Total | 38.90 |
The company manufactures, distributes and sells a wide range of products like drinkware, insulated ware, dinnerware, serveware, and glassware across India. It has products across categories like cleaning supplies, stationery, small kitchen appliances, moulded furniture, and air coolers.
“Cello benefits from a distribution advantage due to its large off-take per retailer. Retailers, too, find it advantageous to stock Cello's products due to the comprehensive range, enabling them to fulfill diverse customer demands through a single brand,” says a report by BP Equities.
Its main risks include fluctuations in raw material prices like plastic granules and plastic polymer prices etc and their supply chain issues. It also doesn’t own the trademark for its key brands, like ‘Cello’, ‘Unomax’, ‘Kleeno’ and ‘Puro’. Also, one of its competitors also uses the ‘Cello’ brand name for its writing instruments business.
The company says that any adverse impact on its brand name due to the actions of competitors may adversely impact its reputation and business. Its margins, profitability depend on maintaining its existing capacity utilisation rate.
“Consumer awareness towards safety and quality, shorter replacement cycles, a shift towards the aesthetics of products, loyalty to established brands, increasing disposable income, and nuclearization of families are contributing to the growth of the branded consumerware market in India,” says a report by Geojit, which gives it a 'Subscribe' rating for the issue on a long-term basis.
A report by Choice Broking also believes that the company has a dominant position in the market. “There are growth tailwinds for the sector and CWL is well placed to benefit from the same. But due to a highly priced issue, we are assigning a ‘Subscribe with Caution’ rating for the issue,” it adds.
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