Cello World sees a premium listing. What investors should do now
Cello World listed with a healthy premium of 28% on the exchanges on Monday. On listing, the stock witnessed some profit booking and closed the day with a 22% gain over the issue price.
Analysts believe the premium listing is justified on the back of reasonable IPO valuations, following a strong product demand, financial track record and reputed brand presence.
The IPO received a positive response from investors with subscriptions of nearly 42 times at close.
«After such a strong listing, investors may book profit.
However, those who have a long-term investment horizon can keep a stop loss at 750,» said Shivani Nyati, Head of Wealth, Swastika Investmart.
Cello World's business is broadly divided into two categories, consumer houseware and consumer glassware. It is a prominent player in the consumerware market in India with a presence in consumer houseware, writing instruments and stationery, moulded furniture and allied products and consumer glassware categories.
For FY23, consolidated revenue from operations increased 32% to Rs 1796.69 crore against Rs 1359.18 crore a year ago.
Net profit increased by 30% from Rs 219.52 crore in FY22 to Rs 285 crore in FY23.
It had the highest ROCE among peers between FY21-23 and highest EBITDA margin for fiscal 2021, 2022 and 2023.
«We strongly believe that the Cello World gives allotted investors a long-term opportunity. Hence recommending all allotted investors to hold for longterm, while those who failed to get allotments can accumulate at current levels,» said Prashanth Tapse of Mehta Equities.
Before the IPO, the company had raised Rs 567 crore from anchor investors where marquee investors, including Goldman Sachs, Nomura, SBI Life, Morgan Stanley, participated.
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