<ul><li>Cello World’s proposed IPO is a complete offer for sale by promoters and other shareholders.</li><li>The company manufactures and sells consumer houseware, writing instruments, stationery, moulded furniture and allied products.</li><li>It has 13 across five locations in India, with most facilities in Daman. </li></ul>Mumbai-based Cello World known for its consumer houseware, stationery, moulded furniture and others has filed its Draft Red Herring prospectus (DRHP) with market regulator SEBI to raise funds through for its public offer. The initial public offer (IPO) with a face value of ₹5 is a complete offer for sale (OFS) where promoters and other shareholders will sell shares. The OFS comprises of up to ₹300 crore by Pradeep Ghisulal Rathod, up to ₹670 crore by Pankaj Ghisulal Rathod, up to ₹380 crore by Gaurav Pradeep Rathod, up to ₹200 crore by Sangeeta Pradeep Rathod, up to ₹100 crore by Babita Pankaj Rathod and up to ₹100 crore by Ruchi Gaurav Rathod. The offer is being made through the book building process, wherein not more than 50% shall be allocated on a proportionate basis to Qualified Institutional Buyers (QIBs). Not less than 15% of the shall be available to non-institutional bidders and not less than 35% to retail investors. Its book running lead managers are Kotak Mahindra Capital Company, ICICI Securities, IIFL Securities, JM Financial and Motilal Oswal Investment Advisors Limited. Link Intime India Private Limited is the registrar to the offer. About the company The company has 13 manufacturing facilities which are either owned or leased. It has eight facilities in Daman, two in Haridwar; one each in Baddi, Chennai, and Kolkata. It’s also in the process of establishing a glassware manufacturing facility in Rajasthan. Its distribution network spans across the nation, supported by a sales team of 683 members. For the consumer houseware category, it collaborates with 678 distributors and around 51,900 retailers across India. For stationery, it has 29 super-stockists, approximately 1,450 distributors, and roughly 59,100 retailers. In the moulded furniture and allied products category, it works with 1,067 distributors and around 6,500 retailers located throughout India.

Houseware & stationery maker Cello World seeks SEBI's nod to raise ₹1,750 crore via IPO

<ul><li>Doms has 12% market share in India’s branded stationery and art material market.</li><li>Recently listed stationery players Flair and Cello World gave good listing gains.</li><li>The grey market expects 61% listing gains from Doms. </li></ul>Few school-going children and their parents would be unaware of Doms. The high recall value and its dominant market position will help the ₹1,200 crore public offer is expected to sail through easily, say experts. Stationery makers Flair and Cello World recently made their successful market debuts providing 49% and 22% listing gains respectively. The IPO of Doms, India’s second largest branded stationery and art products maker, will only be better, say experts. “Neither of them are in a dominant position in the market. Doms in a different league altogether. Its distribution is good, and has shown a phenomenal growth since the Covid pandemic and its fundamentals are in place,” <keyword id="127547" type="General" weightage="50" keywordseo="arun-kejriwal" source="Orion">Arun Kejriwal</keyword>, founder at Kejriwal Research &amp; Investment Services, tells Business Insider India. A wide range of products The company sells scholastic stationery, art material, paper stationery, office supplies and more. It had around 12% market share in branded stationery and art materials market in FY23. Its core products such as pencils and ‘mathematical instrument boxes’ enjoy 29% and 30% market share by value in FY23. “They have the widest breadth of product categories amongst their peers in India. Their presence across multiple categories and price points has enabled them to be the fastest growing such company in terms of revenue,” said a report by Anand Rathi which gives it a ‘subscribe for long-term’ rating. Its listed peers in the market are <keyword id="1889881" type="General" weightage="50" keywordseo="kokuyo-camlin" source="Orion">Kokuyo Camlin</keyword>, Linc and Pidilite Industries. Kejriwal too says that the company is focussed on growth. “Based on interactions with the management, they seem focussed on growing volumes and expanding the business,” he adds. The grey market too is placing its bets on the company, as it expects 61% listing gains from the stock. Experts say that this is because only 10% of the offer is earmarked for retail investors, and a lot of people are expected to apply for the issue. The issue will open on December 13 and close on December 15, and has fixed a price band of ₹750-790 per share. The post-Covid turnaround The company posted losses in FY21 due to Covid-19 related lockdown, which resulted in the closure of domestic and export markets, especially educational institutions, offices and workplaces and retail outlets. Ever since, however, it has shown a steady growth. Its revenue from operations grew at a CAGR of 73.45% from FY21 to FY23. Its EBITDA margin more than doubled from 7.45% to 15.4% over FY21 to FY23, the company said in its DRHP. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"><colgroup></colgroup><col /><col /><col /><col /><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Particulars </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY23 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY21 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Revenue from operations </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,211 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹683 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹402 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">PAT </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹102 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹17 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(₹6 crore) </td></tr></tbody></table>Source: DRHP A wide distribution Doms operates 14 manufacturing facilities in Gujarat and <keyword id="18509534" type="General" weightage="50" keywordseo="bari-brahma" source="Orion">Bari Brahma</keyword> in Jammu and Kashmir. It intends to use the net proceeds from the fresh issue to set-up a new manufacturing facility in addition to general corporate purposes. It also has a wide reach and a strong domestic distribution network of over 120 super-stockists, and 4,000 distributors along with a dedicated sales team of over 500 personnel covering more than 120,000 retail touch points over 3,500 cities and towns. It is also expanding internationally and has forged a joint venture with Italian multinational company FILA. It gives them access to international markets, and also augments their R&amp;D and technological capabilities. “Their symbiotic association with FILA, based on mutual synergies, has resulted in expansion of their international footprint in key American and European markets and has helped in the global distribution of ‘Doms’ brand,” said a report by Axis Capital. They also have an exclusive tie-up with certain entities of the FILA Group, for distribution and marketing for all categories of their respective products, under their name and trademark, in India, Nepal, Bhutan, Sri Lanka, Bangladesh, Myanmar, and Maldives. Rooted firmly in its home market, it’s eyeing exports with a focus on backward integration to drive efficiencies. All of it makes Doms a long-term bet, say analysts. SEE ALSO <a href="https://www.businessinsider.in/stock-market/news/stellar-listing-gains-book-profits-if-there-are-bumper-gains-say-experts/articleshow/105630290.cms">Stellar listing gains: Book profits if there are bumper gains say experts</a> <a href="https://www.businessinsider.in/stock-market/news/tata-technologies-stock-doubles-investor-money-on-debut/articleshow/105609598.cms">Va va vroom: Tata Technologies stock doubles investor money on debut</a>

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Houseware & stationery maker Cello World seeks SEBI's nod to raise ₹1,750 crore via IPO

BI India Bureau

Child’s Play: High recall and dominant position add to Doms’ appeal

Katya Naidu