Cello World Shares Rises 4% After Board Greenlights Major Fundraising Plan – What Investors Need to Know

On Wednesday, May 29, Cello World shares rose by over 4.59% after the company announced it would raise funds through a share placement for qualified institutional buyers (QIP). The plan involves issuing 8.654 million equity shares, each valued at ₹5.

By 12:30 pm, the stock was trading at ₹886.90 per share, up from its previous close of ₹860.10.

In an official statement, Cello World mentioned that this fundraising move will need shareholder approval. QIP is a way for listed companies to raise money by selling shares to institutional investors.

Cello World had a strong fourth quarter, with revenue growing by 11% year-on-year to ₹2,000 crore. This growth was driven by a 12% increase in both consumer ware and writing instruments, and a 3% increase in molded furniture.

The company expects revenue growth of 15-17% for the financial year 2025.

Brokerage firm JM Financial has kept its revenue estimates for Cello unchanged for FY2024-26, with a target price of ₹940 by March 2025. They have a “BUY” rating on the stock, praising Cello’s diverse product range, strong brand, wide distribution network, and solid earnings growth.

However, JM Financial also pointed out risks such as fluctuations in polypropylene prices and potential changes in brand licensing agreements. They noted that demand was weak in January and February 2024 but picked up in March before slowing down again in May due to the general elections.