Cello World IPO subscribed 38% on Day 2 so far; HNI quota booked more than twice

The initial public offering (IPO) of Cello World continued to witness a decent response from the investors during the second day of the bidding process. The issue was overall subscribed about 38 per cent on Day 2 so far.

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

According to the data, the investors made bids for 1,80,05,619 equity shares, or 82 per cent, compared to the 2,20,61,947 equity shares offered for the subscription by 1.00 pm on Tuesday, October 31. The three-day bidding for the issue will close for bidding on Wednesday, November 1.

The portion reserved for non-institutional investors (NIIs) saw a subscription of 2.19 times, while the allocation for retail investors was 72 per cent. The allocation for employees was 77 per cent but the quota set aside for qualified institutional bidders (QIBs) was only 2 per cent as of the same time.

Brokerage firms, tracking the issue are mostly positive on it and have suggested to 'subscribe' to it on the back of its pan India presence, strong brand recall, growth potential and sound track record. However, they see the complete OFS nature of the issue and aggressive pricing as the only headwinds for the issue. Shares of the Cello World will be listed on both BSE and NSE.

"Cello World’s strengths, product portfolio, distribution network, position it as an attractive investment opportunity. With a strong brand presence and a proven ability to adapt to changing market dynamics and scale new businesses, Cello World is well-equipped for sustained growth and market leadership," said AUM Capital with a subscribe rating on the issue.

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

The company’s sales, EBITDA and PAT has grown at 31 per cent, 23 per cent and 31 per cent CAGR from FY21-23, on a higher price band it is priced at a multiple of 48 times on FY23 earnings. Given Cello World's strong financial performance with metrics consistently above industry averages, we recommend subscribing to the issue, said Dalal & Broacha Stock Broking.

Cello World has grown its revenue at a CAGR of 31 per cent over FY21-23 and at healthy profitability. The company has 15,891 SKU’s which are some of the positives for the company. Given that, the IPO is fairly valued and the competition remains high in core business, said IndSec Research 'subscribe for long term' rating to the IPO.
 

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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