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Business News/ Markets / Stock Markets/  Cello World stock surges 4% after board approves fundraising via QIP
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Cello World stock surges 4% after board approves fundraising via QIP

In an exchange filing, Cello World announced that the fund-raising will require shareholder approval. At 12:30 pm, the scrip was trading at ₹886.90 per share on Wednesday. The stock closed at ₹860.10.

Cello World share price rallied 4% on Wednesday (https://celloworld.com/)Premium
Cello World share price rallied 4% on Wednesday (https://celloworld.com/)

Cello World shares jumped over 4.59 per cent on Wednesday, May 29, after the company initiated a share placement for qualified institutional buyers on May 29. The company plans to raise funds by issuing 8.654 million equity shares, each with a face value of 5.

At 12:30 pm, the scrip was trading at 886.90 per share on Wednesday. The stock closed at 860.10.

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In an exchange filing, Cello World announced that the fund-raising will require shareholder approval. Qualified Institutional Placement (QIP) is a method used by listed companies to raise funds by issuing shares to qualified institutional buyers.

Cello World's fourth-quarter performance exceeded expectations. The company saw its revenue grew by 11 per cent year-on-year to 2,000 crore, driven by a 12 per cent annual increase in consumer ware, a 12 per cent annual increase in writing instruments, and a 3 per cent annual increase in molded furniture.

The company has projected a revenue growth of 15-17 per cent for the financial year 2025.

Brokerage firm JM Financial has maintained its FY2024-26 estimates for Cello with March 2025 of 940. “Cello guides for 15-17 per cent revenue growth for FY25. We broadly maintain our FY24-26 estimates for Cello with Mar’25 TP of INR 940. We maintain BUY rating," the firm said in a note.

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The firm appreciates Cello's diversified product range, strong branding, extensive distribution network, and exceptional earnings growth and return profile.

However, the brokerage identifies key risks such as significant fluctuations in polypropylene prices and potential changes in brand licensing agreements. While demand was very weak in January and February 2024, it began to pick up pace starting in March 2024. However, it slowed down again in May 2024 due to the general elections, it said.

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Published: 29 May 2024, 05:28 PM IST
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