Cello World Shares Zoomed Over 4% After Approval For Capital Raising Via QIP Committee

Cello World Limited, a leading Indian consumer goods company, has announced significant developments. The company received approval from its Qualified Institutions Placement (QIP) Committee to proceed with an equity issuance aimed at raising fresh capital.

Equity Raise Through QIP

On July 03, 2024, Cello World’s QIP Committee greenlit the opening of the issue. The committee also determined the floor price for the issuance of new equity shares at ₹896.09 per share, following the pricing formula mandated by SEBI ICDR Regulations. This move paves the way for Cello World to raise funds by issuing up to 86.54 lakh new equity shares, each with a face value of ₹5.

Board Approves Broader Funding Options

Cello World’s Board of Directors has also granted broader approval for potential fundraising activities. This includes the issuance of various instruments that can be converted into equity shares, such as fully convertible debentures, partly convertible debentures, and non-convertible debentures with or without warrants. Convertible preference shares are also included in the approved options. These flexible funding avenues provide Cello World with strategic choices to secure the necessary capital for future growth initiatives.

Solid FY24 Performance Fuels Growth Potential

Cello World’s decision to raise capital comes amid a backdrop of strong financial performance in FY24. For the quarter ending March 2024 (Q4FY24), the company generated a revenue of ₹512.5 crore. Furthermore, full-year FY24 revenue reached ₹2,000.3 crore, representing an impressive 11.3% year-over-year increase. This growth was driven by positive contributions from each of Cello World’s core business segments:

• Consumer Goods: ₹327 crore in Q4FY24, with a 12.2% increase for FY24 compared to the previous year.
• Writing Instruments: ₹87.6 crore in Q4FY24, with a 16.9% increase for FY24.
• Molded Furniture: ₹97.9 crore in Q4FY24, with a 3.5% increase for FY24.

Cello World also reported encouraging growth in sales volume across all segments on a quarter-over-quarter basis. The consumer goods segment witnessed a 7-8% volume rise, writing instruments experienced an 11% increase, and moulded furniture recorded an 18% increase in volume during Q4FY24.

On July 04, 2024, Cello World’s share price opened at ₹999.40 and touched the day high of ₹1,024.50 at 09:40 AM

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.