Cello World IPO booked 13% on Day 1 so far; HNI & retailers lead bidders

The initial public offering (IPO) of Cello World saw a mixed response from the investors during the first few hours of the bidding process on the day one. The issue, which kicked-off for bidding on Monday, October 30, mostly drew retail and non-institutional investors for the bidding.

Cello World is selling its shares in the price band of Rs 617-648 apiece with a lot size of 23 equity shares and its multiples thereafter. The pan-India consumerware player is looking to raise Rs 1,900 crore via IPO route, which is entirely an offer-for-sale (OFS) of up to 2.93 crore equity shares by its promoters and other selling shareholders.

According to the data, the investors made bids for 27,89,279 equity shares, or 13 per cent, compared to the 2,20,61,947 equity shares offered for the subscription by 1.00 pm on Monday, October 30. The three-day bidding for the issue will conclude on Wednesday, November 1.

The portion reserved for retail investors was subscribed 16 per cent, while the allocation for non-institutional investors (NIIs) saw a subscription of 24 per cent. The allocation for employees was 19 per cent. However, the quota set aside for qualified institutional bidders (QIBs) was not even off the market as of the same time.

Brokerage firms tracking the IPO are mostly positive on the issue and have a subscribe rating to it, citing its strong brand recall, pan India presence, growth potential and historic track record. However, they see the full OFS status and aggressive pricing as the only headwinds for the issue. Shares of the company will be listed on both BSE and NSE.

Cello World is a well-established brand name and has strong market positions. The company has a diversified product portfolio across price points catering to diverse consumer needs. It has a track record of scaling up new businesses and product categories. with pan-India distribution network with a presence across multiple channels, said Hem Securities with a 'subscribe' rating.

Ahead of its IPO, Cello World raised Rs 567 crore from 39 anchor investors by allocating 87,49,999 shares at a price of Rs 648 per share. ICICI Securities, Kotak Mahindra Capital, IIFL Securities, JM Financial and Motilal Oswal Investment Advisors are the lead managers to the issue, while Link Intime India is the registrar for the IPO.

Cello is a well-known brand in Indian households, and it has a strong market position. The company offers a diversified product portfolio. It has a pan-India presence with a strong distribution network. The financial performance of the company has also been consistent, and it has further plans for expansion as well, said Swastika Investmart in its IPO note.

"However, there are some concerns as well, like that it does not own trademarks for its key brands. Secondly, it faces significant competition from other players in the industry. The issue is a complete offer for sale. In terms of valuation, it seems fully priced" it added, suggesting 'subscribe' rating for high-risk investors with a long-term view.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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