- The stock listed at ₹831 as compared to its IPO price of ₹648.
- The grey market was expecting 25% listing gains from the stock.
- The ₹1,900 crore IPO was subscribed almost 39 times the shares on offer.
During the trading session, it sustained most of its initial gains. The stock closed 22% higher than its issue price.
The market cap of the company is at ₹17,636 crore, as per Bombay Stock Exchange.
The ₹1,900 crore IPO of consumer goods company Cello World was subscribed almost 39 times the shares on offer. QIBs bid aggressively for the issue as this portion was subscribed 108 times as of Wednesday evening.
The non-institutional investor (NII) portion was subscribed 24 times. Its retail portion was subscribed thrice over. The price band has been fixed at ₹617 to ₹648.
The last few companies that debuted on the stock exchanges have given fairly positive listing returns, barring a few.
Here are the listing gains of the last few market debuts
Company has a dominant market position say analysts
The company manufactures, distributes and sells a wide range of products like drinkware, insulated ware, dinnerware, serveware, and glassware across India. It has products across categories like cleaning supplies, stationery, small kitchen appliances, moulded furniture, and air coolers.
“Cello benefits from a distribution advantage due to its large off-take per retailer. Retailers, too, find it advantageous to stock Cello's products due to the comprehensive range, enabling them to fulfill diverse customer demands through a single brand,” says a report by BP Equities.
Its main risks include fluctuations in raw material prices like plastic granules and plastic polymer prices etc and their supply chain issues. It also doesn’t own the trademark for its key brands, like ‘Cello’, ‘Unomax’, ‘Kleeno’ and ‘Puro’. Also, one of its competitors also uses the ‘Cello’ brand name for its writing instruments business.
The company says that any adverse impact on its brand name due to the actions of competitors may adversely impact its reputation and business. Its margins, profitability depend on maintaining its existing capacity utilisation rate.
“Consumer awareness towards safety and quality, shorter replacement cycles, a shift towards the aesthetics of products, loyalty to established brands, increasing disposable income, and nuclearization of families are contributing to the growth of the branded consumer ware market in India,” says a report by Geojit, which gives it a 'Subscribe' rating for the issue on a long-term basis.
A report by Choice Broking also believes that the company has a dominant position in the market. “There are growth tailwinds for the sector and CWL is well placed to benefit from the same. But due to a highly priced issue, we are assigning a ‘Subscribe with Caution’ rating for the issue,” it adds.