Cello World Limited was incorporated only in 2018, the erstwhile promoter Late Ghisulal Dhanraj Rathod, was associated with Cello PlasticIndustrial Works ('CPIW') and the 'Cello' brand since 1962. The company have diversified the product range and brand portfolio over the last six decades and grow the multi-channel distribution network. As of June 30, 2023, they offered 15,891 stock-keeping units ('SKUs') across the product categories. Company owns/leases and operates 13 manufacturing facilities across five locations in BHARAT, as of June 30, 2023, and they are currently establishing a glassware manufacturing facility in Rajasthan. The manufacturing capabilities allow them to manufacture a diverse range of products in-house. The revenue derived from the in-house manufacturing operations aggregated to 78.65%, 82.63%, 79.37%, 82.08% and 79.67% of the total revenue from operations for the Financial Years 2021, 2022 and 2023 and the three months ended June 30, 2022 and June 30, 2023, respectively. The remaining products (consisting mainly of steel and glassware products) are manufactured by third party contract manufacturers. Company has a strong pan-India distribution network. From the distribution network established by CPIW for its thermoware household articles and plastic materials business. For consumer houseware, company has 717 distributors and around 58,716 retailers across Bharat. For writing instruments and Stationery category, company has 29 super-stockist, approximately 1,509 distributors and approximately 60,826 retailers located across Bharat. For Moulded Furniture and Allied Products, they have 1,067 distributors and approximately 6,840 retailers located across India As per financial performance, Cello World Limited has posted total income / net profits of Rs 1,059.58 Cr / Rs 165.54 Cr (FY21), Rs 1,375.10 Cr / Rs 219.52 (FY22), Rs 1,813.43 Cr / Rs 285.05 Cr (FY23) and Rs 479.88 Cr / Rs 82.82 Cr (Q1 FY24). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 11.36 and average RoNW of 35.60% for last three fiscals. Issue is priced at a P/BV of 11.21 as per NAV of 57.79 as on 30.06.23. If we attribute latest earnings of FY22, FY23, TTM and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 62.65, 48.25, 45.56 and 41.51 respectively, which looks fully priced. As per RHP, there is no peers. On BRLM's front, five lead managers are associated with this IPO, and have handled around 163 IPOs in last three fiscals. Kotak Mahindra Capital Company Limited : This is 37th IPO from this BRLM. From last 10 IPOs, 3 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, all are trading above issue price or at par. (As on 25.10.2023) ICICI Securities Limited : This is 42th IPO from this BRLM. From last 10 IPOs, 2 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, all are trading above issue price or at par. (As on 25.10.2023) IIFL Securities Limited : This is 39th IPO from this BRLM. From last 10 IPOs, 2 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, three are trading above issue price or at par. (As on 25.10.2023) JM Financial Limited : This is 38th IPO from this BRLM. From last 10 IPOs, 2 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, one are trading below issue price and remaining are trading above issue price or at par. (As on 25.10.2023) Motilal Oswal Investment Advisors Limited : This is 12th IPO from this BRLM. From last 10 IPOs, 2 opened below issue price and remaining above issue price or at par on the day of listing. As of now, from last 10 IPOs, three are trading above issue price or at par. (As on 25.10.2023) As per financials, Cello World Limited has shown average growth, RoNW is 23.17% and P/E is respectively 62.65, 48.25, 45.56 and 41.51 as per FY22, FY23, TTM and annualised FY24 earnings. So, issue looks fully priced. Company is in business of consumerware, which is highly fragmented and competitive. So, we give SUBSCRIBE rating for listing gains for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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