Cello World IPO: Cello World IPO opened for public subscription today and will close on Wednesday, November 1, 2023. The bidding for anchor investors concluded on Friday, wherein the company collected Rs 567 crore. The price band for its public issue at Rs 617-648 per equity share of face value Rs 5 each. Ahead of the public issue, Cello World shares’ grey market premium (GMP) rose 18.52%, over the upper end of the share price on offer.
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The IPO comprises a fresh issue of 29,320,987 equity shares aggregating up to Rs 1,900 crore and an Offer-For-Sale (OFS) with promoters offloading 29,320,987 shares aggregating up to Rs 1,900 crore. For potential investors, the bidding starts at a minimum of 23 equity shares, with subsequent bids in multiples of 23 equity shares. The shares are likely to get credited on Wednesday, November 8, 2023, and listed on stock exchanges on Thursday, November 9, 2023, according to reports. The company will not receive any proceeds from the net proceeds from the IPO, according to the information available on Chittorgarh.com.
Should you apply for the Cello World IPO?
Mehta Equities: Subscribe with a long-term perspective
“Looking at the valuation at the upper price band of ₹648 and considering annualized earnings and fully diluted post-IPO paid-up capital, the issue presents a Market Cap of ₹13,753 Crores with a P/E of 41.51x on a consolidated basis. This valuation appears reasonable when considering the expected revenue and profit growth. Although the IPO is entirely Offer for Sale (OFS), which may be a concern for new investors, the company’s higher EBITDA/PAT margins and superior Return on Capital Employed (ROCE) compared to its peers suggest strong long-term prospects. Therefore, we recommend investors ‘Subscribe’ to the Cello World IPO with a long-term perspective.”
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Choice Broking: Subscribe with Caution
“At higher price band, CWL is demanding a TTM P/E multiple of 48.8x (to its TTM earning per share of Rs. 13.3), which is at significant premium to the peer average of 38.6x. Thus the issue is overvalued. On the back of diversified product portfolio, wide distribution reach and established brands, the company has maintained a dominant position in the domestic Consumerware market. Its expansion in the glassware products, would further strengthen its position in the market. There are growth tailwinds for the sector and CWL is well placed to benefit from the same. But due to highly priced issue, we are assigning a ‘Subscribe with Caution’ rating for the issue.”
Swastika: Subscribe with a long-term view
“Cello is a well-known brand in Indian households, and it has a strong market position. The company offers a diversified product portfolio with 15841 SKUs. 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. 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. Additionally, the issue is a complete offer for sale. In terms of valuation, the IPO is priced at a P/E of 47.47x, which seems fully priced. Thus, we will suggest a ‘Subscribe’ rating to high-risk investors with a long-term view.”
Besides Cello World, today marks the opening of two of the most-awaited SME IPO offerings. Here’s all that you need to know about them-
Vrundavan Plantation IPO
Vrundavan Plantation IPO opened for public subscription today and will close on Wednesday, November 1, 2023. The price for its public issue at Rs 108 per equity share of face value Rs 10 each. At the upper end of the price band, the company’s promoters and shareholders seek to raise Rs 15.29 crore from the IPO. Ahead of the public issue, Vrundavan Plantation IPO shares’ GMP rose to 37.04%.
The IPO comprises fresh issue of 1,416,000 shares aggregating up to Rs 15.29 crore. For potential investors, the bidding starts at a minimum of 1200 equity shares, with subsequent bids in multiple lots of 1200 equity shares each. The minimum amount of investment required by retail investors is Rs 129,600. The company intends to use the net proceeds from the IPO for the repayment of working capital and unsecured loan, Working capital requirement, General corporate purpose and for meeting public issue expenses.
Transteel Seating Technologies IPO
Transteel Seating Technologies IPO opened for public subscription today and will close on Wednesday, November 1, 2023. The price band for its public issue at Rs 67-70 per equity share of face value Rs 10 each. At the upper end of the price band, the company’s promoters and shareholders seek to raise Rs 49.98 crore from the IPO. Ahead of the public issue, Transteel Seating Technologies IPO shares’ GMP rose to 27.14%.
The IPO comprises a fresh issue of 6,784,000 shares aggregating up to Rs 47.49 crore, and an offer for sale of 356,000 shares aggregating up to Rs 2.49 crore. For potential investors, the bidding starts at a minimum of 2000 equity shares, with subsequent bids in multiple lots of 2000 equity shares each. The minimum amount of investment required by retail investors is Rs 1,40,600. The company intends to use the net proceeds from the IPO for the repayment/repayment of certain debt facility availed by the company, purchase of equipments to facilitate manufacturing, working capital requirements and general Corporate Purposes.
(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)
