Indian cookware maker Cello World's IPO garners strong response

Concord Biotech

01/11/2023 14:11

By Rama  Venkat
       BENGALURU, Nov 1 (Reuters) - Indian kitchenware products
maker Cello World's initial public offering (IPO) was
oversubscribed by nearly 40 times, higher than similar IPOs
recently, inviting bids worth 556.19 billion rupees ($6.7
billion), exchange data showed on Wednesday.
    Investors bid for more than 858.3 million shares, compared
with the 22 million shares on offer, with institutional
investors showing the most interest, the data showed.
    "Despite markets being on weaker note, Cello World offer
received an overwhelming response, although retail investors
remained cautious as IPO has only an offer for share sale from
existing stakeholders," said Prashant Tapse, senior vice
president (research) at Mehta Equities.
    Cello World's shareholders -- including its promoters, an
Indian market term for large shareholders who can influence
company policy -- are selling stock worth 19 billion rupees in
the IPO, while the company itself if not offering any shares.
    Other IPOs where the company did not sell shares have seen
tepid interest. For example, the IPOs of Blue Jet Healthcare
 BLUJ.NS , Mankind Pharma  MNKI.NS  and Concord Biotech
 CONB.NS  were oversubscribed 7-27 times.
    Cello World has set a price band of 617-648 rupees per share
for the IPO. At the top end, it will be valued at 137.53 billion
rupees, three times rival Borosil's  BORS.BO  market value and
nearly seven times that of Stovekraft  STVE.NS  and Butterfly
Gandhimathi Appliances  BUTT.NS .
    "On valuation, it seems the issue is reasonably priced,
reflecting an expected revenue and profit growth," said Tapse.
    The company's consolidated net profit jumped 25.2%
year-over-year to 774.4 million rupees in the quarter ended June
30, while revenue rose 9%.
    In that same period, Borosil's profit shrunk 62.5% due to
higher raw material costs, while revenue climbed 16%.
    Cello World is expected to list on the stock exchanges on
Monday.
    Kotak Mahindra Capital and ICICI Securities were among the
lead IPO's managers.
 
 ($1 = 83.2840 Indian rupees)

 (Reporting by Rama Venkat in Bengaluru; Editing by Savio
D'Souza)
 ((ramavenkat.raman@thomsonreuters.com; https://twitter.com/ramavenkat0607;
 +91 8095218099;))