
Shares of Cello World Ltd made a strong debut at Dalal Street on Monday but the stock saw profit booking after the debut. However, the stock remained range bound after listing, but more sellers after the opening tick weighed on the sentiments for the stock.
Cello World shares were listed at a premium of roughly around 28 per cent on both the BSE and NSE as the stock debuted at Rs 831 and Rs 829, respectively, against the issue price of Rs 648 apiece. However, the stock lost its steam and investors took the money off the table as the trading began post listing. Cello World's shares inched up initially to Rs 834.50 on BSE, but crashed 6 per cent to Rs 781.50 on Monday. The company's market capitalization slipped below Rs 17,000 crore mark and the stock remained below Rs 800-level as of 1.00 pm on its maiden trading session. Analysts suggest investors to book profit after a strong listing pop for the investors citing the expensive valuations and factoring in the most of the positives. However, some suggest that investors should consider to keep the allocation partially for the longer term in the portfolios considering the growth opportunities. Cello World IPO note had a decent listing on the bourses The company has a strong ROCE of 44.5 per cent in FY23. Cello benefits from a distribution advantage due to its large off-take per retailer, said Parth Shah, Research Analyst at StoxBox, "Retailers find it advantageous to stock Cello's products due to the comprehensive range, enabling them to fulfill diverse customer demands through a single brand. At the current levels, we advise investors to book profits as most of the positives seem to be priced in. Investors can reconsider the company”s shares at lower levels," he added. Cello World raised a total of 1,900 crore via its IPO, which was entirely an offer-for-sale (OFS) by its promoters and other selling shareholders. The pan-India consumer-ware player sold its shares in the range of Rs 617-648 apiece with a lot size of 23 equity shares between October 30 and November 1. The issue was overall subscribed 38.9 times. Cello World delivered a solid 28 per cent return to the investors, said Mahesh M Ojha, AVP - Research at Hensex Securities. "Considering the company's ability to manufacture a diverse range of products and maintain optimal inventory levels, and strong historical financial results, the company portrays good growth prospects, we suggest investors book half profits on the listing day." Cello World is a well-known pan-India consumer product company. It mainly deals in three categories- writing instruments and stationery, molded furniture, consumer housewares. Cello World has an experience of more than six decades in the field of consumer product industry. It has 13 manufacturing units situated in five different locations in India. Despite the premium valuation, the IPO received a positive response from investors, due to the company's strong brand recognition, diversified product portfolio, and pan-India presence, said Shivani Nyati, Head of Wealth, Swastika Investmart. "After a strong listing, investors may book profit, she added. "Those who have a long-term investment horizon can keep a stop loss at Rs 750.
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