Cellecor Gadgets IPO Review: Cellecor gadgets is coming up with its Initial Public Offering. This is an SME (small and medium size enterprise) which is going to be listed on NSE SME.

The IPO will open for subscription on 15th September 2023, and closes on 20th September 2023. In this article, we will look into Cellecor gadgets IPO Review and analyse its strengths, weaknesses, GMP and more. Keep reading to know more!

Cellecor Gadgets IPO Review – About The Company

Cellecor Gadgets, a company established in 2020, specializes in the procurement, branding, and distribution of a diverse range of consumer electronics. The company’s extensive product portfolio includes televisions, mobile phones, smart wearables such as smart watches and neckbands, and mobile accessories.

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With a strong network of over 1200 service centres and 800 distributors, Cellecor Gadgets has established a significant presence across India. The company offers more than 300 unique products that are available in over 24,000 retail stores, catering to the needs of more than 100 million customers nationwide.

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Entertainment and Communication: The Entertainment and Communication vertical offers a diverse range of products. This includes 35 models of televisions, 15 types of sound systems and sound bars, and 70 variants of mobile phones.

In terms of revenue generation, mobile phones lead the segment, contributing 46.76% to the total revenue. Appliances also play a significant role, accounting for 22.43% of the total revenue.

Peripherals: The Peripherals segment focuses on smart wearables like smart watches and neckbands, with over 145 SKUs contributing to 10.71% of total revenue.

Modern Accessories: Modern Accessories vertical handles the distribution of over 40 SKUs of mobile accessories like power banks, data cables, and USB chargers, generating 20.11% of total revenue.

Cellecor Gadgets sells its products through three major channels: Direct Distributors, online e-commerce platforms like Amazon and Flipkart, and its own website.

In the fiscal year 2023, the top three states generating the most revenue were Uttar Pradesh, Delhi, and Haryana. These states accounted for 23.33%, 22.63%, and 12.78% of the total revenue, respectively

Cellecor Gadgets IPO Review – Industry Overview

MOBILE AND ACCESSORIES: India’s mobile and accessories industry is growing due to increased smartphone adoption, higher disposable income, and online shopping popularity. With 1.2 billion mobile and 600 million smartphone users in 2022, the demand for mobile accessories is rising.

The global mobile accessories market, valued at USD 82.88 billion in 2021, is expected to grow at a CAGR of 6.8% from 2022 to 2030, driven by new technologies like wireless headsets and speakers.

The Indian mobile accessories industry is projected to reach INR 25,280 crore by 2023. The offline segment dominates the market with a 69.2% revenue share, with increasing demand for high-end devices like smartwatches and mobiles.

SMARTWATCHES AND TV’S: The global smartwatch market, worth USD 30,434.1 million in 2021, is expected to grow at a CAGR of 8.2% from 2022 to 2030. India, now the top region for smartwatch shipments with 27% of the global market, saw a 121% YoY growth in Q1 2023 due to affordability, customer demand, and variety. The trend is likely to continue with the rising preference for fitness and health monitoring features.

Smart TV shipments in India grew by 28% YoY in 2022, driven by festive season sales, new launches, discounts, and promotions. Indian brands accounted for 24% of shipments.

New features like integrated soundbars, video call facility, higher refresh rate for gaming, and free Live TV channels are now common. TVs of 32” made up 47% of the volume due to their affordability (sub-INR 15,000). Xiaomi led the market in 2022 with an 11% share, driven by the Mi TV 5A series and Redmi Smart TV series.

Cellecor Gadgets IPO Review – Financials

Upon examining the financials of Cellecor gadgets, we observe a significant growth in their assets, increasing from ₹23.6 crores in March 2022 to ₹70 crores in March 2023.

Their revenues have also seen a substantial rise, escalating from ₹121.2 crores in March 2022 to ₹264.3 crores in March 2023. This increase in revenue is accompanied by a growth in Profit After Tax (PAT), which has surged from ₹2.1 crores in March 2022 to ₹7.9 crores in March 2023.

As of March 2023, the company’s borrowings have risen from ₹1.2Cr in March 2022 to ₹20.84Cr.

In terms of return ratios, the company boasts a Return on Equity (ROE) of 57.71% and a Return on Capital Employed (RoCE) of 63.88%.

Furthermore, as of March 2023, the company’s debt-to-equity ratio stands at 1.5, indicating an increase in leverage.

FINANCIAL METRICS: 

(Source: RHP of the company)

Competitors of the Cellecor Gadgets:

While there are no publicly traded companies in India that operate in a similar business, competition is faced from both domestic and international entities. However, the major players in the Indian mobile accessories market include:

Apple India Private Limited, Samsung India Electronics Pvt. Ltd., Xiaomi Technology India Private Limited, Imagine Marketing Limited (boAt), Sony India Private Limited, Intex Technologies (India) Ltd., Philips India Limited, Bose Corporation India Private Limited, Portronics Digital Private Limited, and Belkin India Pvt Ltd.

Strengths of the company:

  • Cellecor stands out with its unconventional business and marketing strategies. It offers a competitive and high-demand product variety compared to other brands. Collaborations with brand partners like Bajaj FinServ and Cashkaro enhance the customer experience and simplify the purchasing process.
  •  Cellecor has Strong logistic chain with established warehousing hubs and a robust distribution channel across various states in India, including Delhi, Assam, Uttar Pradesh, Karnataka, Maharashtra, Madhya Pradesh, and West Bengal. This network enables the company to sell over 300+ SKUs to 28 states and union territories, supplying to around 800+ distributors & 24000+ retailers.
  •   In addition to offering a standard warranty, Cellecor provides customer support and after-sales services through its in-house CRM and DMS. With over 1200+ authorised service providers, the company is readily available to assist customers with any queries, concerns, or technical issues.
  •   Cellecor offers an extensive product portfolio that provides the company with a competitive advantage in terms of price range and product variety. The portfolio includes 12 models of neckbands, 9 True Wireless Stereo (TWS) devices, 10 power banks, 10 smart TVs, 7 smart watch models, and 18 mobile phone models. This wide array of products underscores the company’s commitment to diversity and innovation.
  •  The company’s strong R&D team consists of more than 50 engineers specialising in hardware design and development, firmware design and development, software design and development, and mobile application development.

Weaknesses of the Company

  • There are several weaknesses that could potentially hinder the business. The company’s reliance on a limited set of suppliers for a substantial portion of their materials and components could negatively impact their cash flow. This dependence on third-party suppliers could pose a significant risk.
  •  The company faces stiff competition both domestically and internationally. Many of these competitors have greater brand recognition, longer operating histories, and more substantial financial, research, and technological resources. They also have access to cheaper capital, which allows them to offer lower prices and a larger variety of products to gain market share.
  • The company’s lack of an in-house manufacturing facility could be seen as a potential vulnerability. This situation leads to a total dependence on external manufacturers for the production of their products. Therefore, any production delays or operational disruptions from these third-party manufacturers could pose a significant risk to the company.
  • forecasting demand for individual products is challenging due to variations in economic conditions, changes in customer preferences, relatively short product life cycles, changes in competition, seasonality, and reliance on key sales channel partners. Any failure to achieve minimum purchase commitments or secure sufficient, cost-effective quantities of products or production materials could adversely impact revenues, profit, and cash flows.
  •  The company’s financial performance and growth are heavily dependent on direct distributors, which constitute 96.74% of their business. This concentrated reliance may pose a significant financial risk.

Cellecor Gadgets IPO Review – GMP

The SME IPO for Cellecor Gadgets is set at a price band of ₹87-92. The latest grey market price stands at ₹38. The IPO is projected to list at a premium of 41.3%, with an estimated listing price of ₹130.

Cellecor Gadgets IPO – Key IPO Information

ParticularsDetails
IPO Size50.77Cr
Fresh Issue50.77Cr
Opening dateSeptember 15, 2023
Closing dateSeptember 20, 2023
Face Value₹10 per share
Price Band₹87 to ₹92
Lot Size1200 shares
Minimum Lots1 (1200 shares)
Maximum Lots1 (1200 shares)
Investment Amount₹1,10,400
Listing DateSeptember 28, 2023

Promoters: Mr. Ravi Agarwal and Mr. Nikhil Aggarwal 

Book Running Lead Manager: Narnolia financial services ltd

Registrar to the Offer: Skyline Financial services Private ltd

The Objective of the Issue: The company intends to utilize the net proceeds from the issue towards the funding of the following objects:

  1. Working Capital Requirement
  2. General Corporate Purposes and
  3. Issue Expenses

In Closing

Cellecor Gadgets is steadfast in its commitment to innovation and growth. The company’s regular research and development activities are leading to the introduction of new products, including men’s grooming goods and white goods such as washing machines. These initiatives are not only aimed at reinforcing Cellecor’s market position but also at exploring new opportunities for expansion and success.

However it’s important to note that the minimum investment for this SME IPO is 1,10,400 which is higher than the main line IPO.

What do you think about the company? Let us know in the comments below.

Written by Niharika Jadhav

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