Cello World shares up 7%, hit year's high on QIP launch

Shares of houseware, stationery, and moulded furniture maker Cello World Ltd surged nearly 7% and hit the year's high at ₹1024.50 on the BSE today after the company launched a share sale to institutional investors via a QIP or qualified institutions placement at about 11% discount from the previous closing price of ₹960. The company is eyeing around ₹730 crore via QIP.

In a stock exchange filing, Cell World says after a special resolution passed in the extraordinary general meeting on June 26, 2024, the QIP committee met on July 3, 2024, and authorised the launch. "QIP Committee has fixed the ‘relevant date’ for the issue and accordingly the floor price in respect of the issue has been determined, as ₹896.09 per equity share," the company says. The term sheet shows an indicative price of ₹852 apiece for the issue.

The QIP Committee also adopted the preliminary placement document with the application form for the issue.

The shares of the company, meanwhile, are currently trading at 4.04% up (1.08 PM) at ₹1000.25 on the BSE, taking the company's m-cap up to ₹21,228.41 crore. Cello World shares have given a 26.44% return in the past year, while the scrip surged 25.58% in the year-to-date period. In the past six months, one month and a week periods, the share has risen 14.83%, 19.99%, and 13.04%, respectively.

Cello World's consolidated revenue grew 5% YoY to ₹510 crore in Q4 FY24, down 3% QoQ, while EBITDA grew 20% YoY to ₹130 crore (up 1% QoQ). EBIDTA margins expanded by 330bp YoY to 26%, up 90bp QoQ, as gross margin improved 150bp QoQ, aided by lower raw material costs and a favourable product mix. The company's adjusted PAT grew 5% QoQ to ₹88.8 crore.

The QIP of the houseware company comes eight months after the launch of its public issue, which debuted on the exchanges at a 28% premium. The ₹1,900-crore IPO, completely an offer for sale by promoters, was subscribed 38.90 times as it received bids for 85.83 shares against the total of 2.21 crore shares on offer.

The company boasts an extensive product portfolio across three key categories: consumer houseware, writing instruments and stationery, and moulded furniture and related products. During the Financial Years 2021, 2022 and 2023, Cello claims to have launched 397, 169 and 380 new products across its three product categories, respectively.

Cello has ownership or leasing of 13 manufacturing facilities in five different locations, including eight in Daman in the Union Territory of Daman and Diu; two facilities in Haridwar, Uttarakhand; one facility in Baddi, Himachal Pradesh; one facility in Chennai, Tamil Nadu; and one facility in Kolkata, West Bengal as of March 31, 2023.

For the Consumer Houseware category, Cello collaborates with 678 distributors and around 51,900 retailers across India. For writing instruments and stationery, it has 29 super-stockists, around 1,450 distributors, and roughly 59,100 retailers. In the moulded furniture and allied products category, it works with 1,067 distributors and around 6,500 retailers.