Cello World files papers with SEBI for ₹1,750 cr IPO

Mumbai-based consumer ware company Cello World Ltd, which is into writing instruments and stationery, and moulded furniture and allied products categories, has filed its draft red herring prospectus (DRHP) with capital markets regulator SEBI (Securities and Exchange Board of India) to raise ₹1,750 crore via initial public offering (IPO).

The IPO, with a face value of ₹5, is a complete offer for sale (OFS) of up to ₹1,750 crore by the promoters and other selling shareholders.

The offer includes a reservation of up to ₹10 crore for subscription by eligible employees. It comprises up to ₹300 crore by Pradeep Ghisulal Rathod, up to ₹670 crore by Pankaj Ghisulal Rathod, up to ₹380 crore by Gaurav Pradeep Rathod, up to ₹200 crore by Sangeeta Pradeep Rathod, up to ₹100 crore by Babita Pankaj Rathod and up to ₹100 crore by Ruchi Gaurav Rathod.

The offer is being made via the book-building process, wherein not more than 50% of the offer will be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the offer will be available for allocation to non-institutional bidders and not less than 35% of the offer will be available for allocation to retail individual bidders.

As of March 31, 2023, the company offered a wide range of 15,841 stock-keeping units ("SKUs") spanning its various product categories. In 2017, it ventured into the glassware and opal ware business under the "Cello" brand.

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. It is also in the process of setting up a glassware manufacturing facility in Rajasthan.

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.

For the fiscal year 2023, Cell’s consolidated revenue increased 32.19% to ₹1,796.69 crore against ₹1,359.18 crore a year ago. Net profit increased by 29.86% from ₹219.52 crore in fiscal 2022 to Rs 285 crore in fiscal 2023. “It had the highest ROCE amongst the peers in FY 2021 and FY 2023 and highest EBITDA Margin for fiscal 2021, 2022 and 2023,” claims Cello.

The company was founded by late Ghisulal Dhanraj Rathod, formerly the promoter and father of two current promoters, Pradeep Ghisulal Rathod and Pankaj Ghisulal Rathod. He had been associated with Cello Plastic Industrial Works and the "Cello" brand since 1962.

The company competes with Indian companies like Borosil Limited, Kokuyo Camlin Limited, La Opala RG Limited, Stove Kraft Limited, TTK Prestige Limited, Linc Limited, and Hawkins Cookers Limited.