Cello World IPO Lists with a 27.93% Premium

Cello World Ltd had a very robust listing on 06th November 2023, listing at a smart premium of 27.93%, but it failed to hold on to the listing gains and tapered towards the close of trade on 06th November 2023. While the closing price on 06th November 2023 was above the IPO issue price for the day, it closed below the listing price of the IPO. For the day, the Nifty closed 181 points lower while the Sensex closed a full 595 points lower. Both the Nifty and the Sensex rallied through the day and this performance by Cello World Ltd on the day of listing was more out of weariness in the counter after a very strong listing.

IPO subscription and pricing details for Cello World IPO

The stock had seen a very strong subscription in the IPO. The subscription was 41.69X  overall and QIB subscription was at 122.20X. In addition, the retail portion had got subscribed 3.21X in the IPO while the HNI / NII portion also got a healthy subscription of 25.65X. Hence the listing was expected to be fairly strong for the day. However, while the listing was strong, the post listing performance was not up to the mark. Remember, the circuit filter for most mainboard IPOs is kept at 10% above and below the listing price of the day on the day of listing. In the case of Cello World Ltd, the strong subscription allowed price discovery at the upper end of the band and got a good listing, but the close was less than satisfactory. Here is the Cello World Ltd listing story on 06th November 2023.

The IPO price was fixed at the upper end of the band at ₹648 per share which was anyways along expected lines considering the relatively strong subscription in the IPO. The price band for the IPO was ₹617 to ₹648 per share. On 06th November 2023, the stock of Cello World Ltd listed on the NSE at a price of ₹829 per share, a strong premium of 27.93% above the IPO issue price of ₹648 per share. On the BSE also, the stock listed at ₹831 per share, a premium of 28.24% over the IPO issue price of ₹648 per share.

How the stock of Cello World IPO closed on both exchanges

On the NSE, Cello World Ltd closed on 06th November 2023 at a price of ₹792.15 per share. That is a first day closing premium of 22.25% on the issue price of ₹648 per share. However, it marks a discount of -4.45% below the listing price of ₹829 per share. In fact, the listing price turned out to be just below the high price of the day and the stock traded almost for the entire trading day below the opening listing price. On the BSE also, the stock closed at ₹791.90 per share. That represents a first day closing premium of 22.21% above the IPO issue price. However, the closing price for the day was at a discount of -4.71% on the listing price on the BSE at ₹831 per share. On both the exchanges, the stock listed strongly above the IPO issue price and also managed to close Day-1 above the IPO issue price. However, the pressure of selling was visible on the counter in both the stock exchanges. In fact, on the NSE and the BSE, the opening price turned out to be very near to the higher price of the day. On the other hand, the closing price was much closer to the low price of the day, showing a lot of weakness in the counter post listing.

Remember, that the company is subject to 10% circuit filters on both side. The upper circuit filter on the NSE was ₹911.90 per share while the lower circuit price on the NSE was ₹746.10 per share. In comparison, the high price of the day at ₹837.40 per share was much below the upper circuit price. Even the low price of the day at ₹782 per share was much above the lower circuit limits for the day.

Price volume story on the NSE

The table below captures the opening price discovery in the pre-open period on the NSE.

Data Source: NSE

Let us look at how the stock traversed on the National Stock Exchange (NSE) on 06th November 2023. On Day-1 of listing, Cello World Ltd touched a high of ₹837.40 per share on the NSE and a low of ₹782.00 per share. The premium to the IPO price sustained through but the premium to the listing price could not really be sustained. While the low price of the day was just below the IPO closing price, the opening price of Cello World Ltd was very close to the high price of the day. Mainboard IPOs do not have an upper circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment. However, on listing day, this IPO was subjected to the standard 10% upper and 10% lower circuit limit.

The High Price of the day at ₹837.40 per share was well below the upper circuit price of ₹911.90 per share. Similarly, the Low Price of the day at ₹782.00 per share was well above the lower circuit price of ₹746.10 per share. On Day-1 of listing, the Cello World Ltd stock traded a total of 179.48 lakh shares on NSE amounting to value of ₹1,446.80 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers, with serious selling emerging towards the end. The stock closed the day with pending unfulfilled sell orders of on the NSE.

Price volume story on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 06th November 2023. On Day-1 of listing, Cello World Ltd touched a high of ₹834.70 per share on the BSE and a low of ₹781.50 per share. The premium to the IPO price sustained through but the premium to the listing price could not really be sustained. While the low price of the day was just below the IPO closing price, the opening price of Cello World Ltd was very close to the high price of the day. Mainboard IPOs do not have an upper circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment. However, on listing day, this IPO was subjected to 100% upper circuit and 50% lower circuit limit.

The High Price of the day at ₹834.70 per share was well below the upper circuit price of ₹1,583.80 per share. Similarly, the Low Price of the day at ₹781.50 per share was well above the lower circuit price of ₹395.95 per share on the BSE. On Day-1 of listing, the Cello World Ltd stock traded a total of 13.31 lakh shares on BSE amounting to value of ₹106.91 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers, with serious selling emerging towards the end. The stock closed the day with pending unfulfilled sell orders of on the BSE.

Market capitalization, free float, and delivery volumes

While the volumes on the BSE were not as much as on the NSE, the trend was once again the same. The order book through the day showed a lot of pressure and that almost sustained till the close of trading session. The sharp spike in the Nifty and the Sensex helped get a good listing, but did not help to sustain these gains. On the NSE, out of the total 179.48 lakh shares traded during the first day of trading, the deliverable quantity represented 123.13 lakh shares or a deliverable percentage of 68.60% on the NSE, which is higher than the routine listing day median. That shows a lot of delivery action in the counter. Even on the BSE, out of the total 13.31 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 9.34 lakh shares representing total deliverable percentage of 70.21%, which is at par with the delivery ratio on the NSE. Unlike the SME segment stocks, which are on T2T on the day of listing, the mainboard IPOs permit intraday trading even on the day of listing.

At the close of Day-1 of listing, Cello World Ltd had a market capitalization of ₹16,806.58 crore with free-float market cap of ₹2,857.12 crore. Cello World Ltd has issued capital of 2,122.31 lakh shares with a par value of ₹5 per share.