At the age of 59, Cello World’s Managing Director and Chairman Pradeep Rathod became the newest billionaire in India.
Cello World, a Mumbai-based firm, is the latest member of the country’s billionaires club. It produces a range of kitchenware, from snack boxes and water bottles to storage containers and plastic furniture. Cello World sells stationery, pencils, and molded furniture in addition to cookware, which makes up more than two-thirds of its total revenue.
The business went public recently. Cello World’s IPO price of Rs 648 was 28% higher than the price at which their shares were listed, and the issue was 39 times oversubscribed.
Rathod is a seasoned expert with more than 40 years of manufacturing and trade expertise in raw materials, plastic, and thermoware products. Since the beginning, he has played a key role as a Director in Cello World. Gaurav Rathod, Pradeep Rathod’s son, and Pankaj Rathod, Pradeep Rathod’s younger brother, are both managing directors in the company. The Rathods are major shareholders of Wim Plast Ltd, a BSE-listed firm best known for its Cello-branded plastic furniture.
Pradeep Rathod – Early Life
Cello World began in 1962, when Pradeep’s late father, Ghisulal Rathod, partnered with a small maker of plastic items. Building on this foundation, Pradeep and his 56-year-old younger brother Pankaj Rathod, who serves as the company’s joint managing director, have expanded into new product categories.
Pradeep’s son, Gaurav, who received his education in the United Kingdom, plays an important role as joint managing director, contributing to Cello World’s continuous growth.
According to Forbes, Pradeep’s $ 44% stake in Cello World is worth $1 billion.
Cello World, based in Mumbai, has grown into a well-known supplier of kitchenware, with a diverse product line that includes snack boxes, water bottles, storage containers, and plastic furniture.
The company’s product line also includes plastic, glass, and porcelain goods, resulting in a 70% increase in sales.
Cello World, which manufactures consumer housewares, devices for writing, and molded furniture, was compelled to boost the IPO size to Rs 1,900 crores from the Rs 1,750 crores suggested in the offer document submitted with the SEBI in August of this year. The issue is a comprehensive offer for sale (OFS) of shares by the promoters and other selling shareholders, which implies the money will not go to the firm, instead, it will go to the current owners.
Rathod explained why the IPO size was increased, saying, There was a lot of demand, so we had to scale it up a little bit. We are just selling 13.82% of our investment, not the whole stake.
He also stated that Cello World is a B2C firm and that the brand would grow and expand if its shares were listed on public exchanges.
Rathod stated that the company gets 65% of its sales from the consumer houseware division, 18% from molded furniture, and roughly 16% from writing instruments.
Cello World has reserved up to 50% of the shares in the public offering for qualified institutional buyers (QIB), 15% for non-institutional investors (NII), and 35% for retail investors, according to the offer document filed with the SEBI. Under the employee reserve part, the business has reserved shares worth 10 crore for qualified workers, which will be issued at a discount of Rs 61 per equity share.
Cello’s consolidated revenue increased 32.19% to Rs 1,796.69 crore in fiscal year 2023, from Rs 1,359.18 crore the previous year. From Rs 219.52 crore in fiscal 2022 to Rs 285 crore in fiscal 2023, net profit increased by 29.86%.
2023
2022
Percentage Increase
Consolidated Revenue
Rs 1796.69 crore
Rs 1359.18 crore
32.19%
Net Profit
Rs 285 Crore
Rs 219.52 crore
29.86%
Pradeep Rathod – Journey So Far
Cello World is a company that manufactures a variety of home items. Understanding the everyday demands of the Indian family, Cello offers a diverse product line that includes melmoware, therm-oware, opal ware, kitchen appliances, glassware, melamine ware, automotive tools and dies, cleaning equipment, and air conditioners. With significant technological improvement, Cello has driven the transformation of the Indian home industry.
Plastic housewares goods were introduced by the firm in the 1980s. Cello entered the furniture market in the 1990s, and in 2017, Gaurav, who had joined the company seven years prior, introduced the ‘opalware’ section.
From seven machines and 60 employees, the firm now employs over 6,000 people and operates plants in Haridwar, Kolkata, Chennai, Daman, Pardi, and Baddi. Furthermore, the company’s well-known pen and stationery business was sold to the French company BIC in 2013.
Cello World sells pens, stationery, and molded furniture in addition to its signature kitchenware section, which accounts for roughly two-thirds of total revenue.
The category currently accounts for 18% of total revenue.
Cello World shares, which sell kitchenware under the Cello name, debuted at a 28% premium to their IPO price of Rs 648, and the offering was 39 times oversubscribed.
It is predicted to expand even faster, at a compounded annual rate of 10.2%, reaching Rs 565 billion ($6.8 billion) by fiscal 2027, as Indians renovate their kitchens and stock them with modern items.
The firm hopes to capitalize on rising local demand for plastic furniture, which is estimated to reach Rs 270 billion ($3.3 billion) by fiscal 2027, up from Rs 122 billion ($1.5 billion) in fiscal 2022.
Cello World’s revenues have increased by 70% in the last two years. In the fiscal year that ended in March 2023, the firm earned Rs 17.97 billion. Over that time, net profit climbed by 58% to Rs 2.8 billion.
Revenue Can Grow At 30% CAGR Over Next Two Years: Cello World
Pradeep Rathod – Philanthropy
Rathod, in addition to his commercial success, is involved in charitable organizations and serves as President of the JITO Administrative Training Foundation.
Pradeep Rathod – Awards and Recognitions
Known as one of the world’s most prominent plastics manufacturers and India’s indisputable market leader, Cello is a globally recognized brand known for its vitality and spirit of innovation. Cello is continually striving to bring in the latest and greatest technology to set new quality benchmarks and to develop to carve new trails in the industry.
Awarded the renowned PLEXCONCIL AWARD 18 times in a row for NO.1 exceptional performance.
The Cello Group, which manufactures India’s favorite Cello pens, is worth Rs.1000 crore.
FAQs
Who is the Chairman of Cello World?
Pradeep Rathod is the chairman and joint Managing Director of Cello World.
What is the price of Cello World IPO?
Cello World’s IPO price of Rs 648 was 28% higher than the price at which their shares were listed, and the issue was 39 times oversubscribed.
How much are the sales from various product lines of Cello?
The company gets 65% of its sales from the consumer houseware division, 18% from molded furniture, and roughly 16% from writing instruments.
The global wholesale market grew from $42,048.41 billion in 2021 to $45,502.44 billion in 2022 at a CAGR of 8.2%. In August 2022, total wholesaler sales in the US amounted to almost $700 billion, an increase of about $100 billion year-on-year.
Wholesalers’ Monthly Sales in the US from Jan 2017 to Aug 2022
Are you thinking of starting your wholesale business but confused about where to begin? Don’t worry! We understand how overwhelming it can get when you try to start a new business.
Right now, you might be struggling with questions like what to sell, where to sell, how to start selling, how much capital you need to invest, and so on.
Here are answers to all your questions related to wholesale business to help you get ready for future challenges.
Let’s start with the very basics. The companies manufacture the products that are ultimately sold to the customers by the retail shopkeepers.
However, there is a connecting link between these two units i.e. manufacturer and seller, those are known as wholesale distributors. They manage and transfer the goods from the companies to the retailers.
They make a profit by buying the goods at a lower price from the companies and selling them to small or big shopkeepers at a higher price.
Majorly, wholesale distributors sell their products to retailers, contractors, merchants, institutional and commercial users, etc., who need bulk supplies.
As a wholesale distributor, you run an independently operated firm that buys products directly from the manufacturer, thus, taking ownership of the products. These products are stored in the warehouse, from where they are supplied to your customers. It is similar to the retail business except that you will be dealing in a B2B realm.
The wholesale industry is large. In the US there are about 330,000 companies involved in the wholesale distribution industry with an annual sale of around $7 trillion.
In this situation, you need to have certain skills to succeed in this business such as great negotiation skills, the ability to find the next bestseller before anyone else, and above all, amazing salesmanship to make a deal appear irresistible to your customers.
In addition to these skills you also need good operational and management skills, especially to handle backend activities such as warehouse setup and organization, shipping and receiving, etc.
This is a service business where you have to understand the need of your customers and find ways to serve them well or we should say better than your competitors.
Also, you will need a warehouse to keep your purchased goods. The size of the warehouse will vary as per the product/s you are dealing with. It is always important to have enough storage space as many wholesale businesses suffer losses owing to storage shortages.
It is also suggested to have a warehouse not very far off from the market so you can easily supply goods to the customers without incurring a high delivery cost.
However, the problem is that the prices of land at such places are quite high and usually beyond a beginner’s budget. In such a situation, it is advised to lease or rent a place.
If you do not store the goods at your facility and instead directly supply them from the manufacturer to the seller, you are working as a broker. The difference between a broker and a distributor is that the distributor takes the title and legal ownership of the product before selling them further.
The broker, on the other hand, uses dropshipping services and supplies the products directly from manufacturer to customer without bearing the storage costs.
How to start your wholesale business?
There are three ways to start a wholesale business. The first option is to start from scratch. This would require a good amount of investment both in terms of time and money, as well as a great deal of hard work as you will have to do everything on your own.
Establishing a warehouse, finding the right product to sell, choosing the buyers and sellers, etc., alone can be very hectic. The investment in this case will vary depending on the type of product you want to sell.
Alongside, you would also require a good knowledge of sales and marketing. It is a complete “make or break” scenario where everything is on your shoulders.
The second option is buying an existing business. This is a costly option and in addition to that, it has its kind of risk involved. The reputation and level of success of the previous owner would have a great impact on your business.
However, there are certain advantages associated with this business model. You will inherit the customer base along with the business as well as you can have the seller’s knowledge bank from the previous owner.
The third option is buying a business opportunity. This is the riskiest option out of all. You will have to explore all the business opportunities thoroughly before you finally decide to invest your time and money into them.
However, if you can finally strike the right opportunity it would mean quick success as you get support and training from the originating company.
Before you choose any of the above-mentioned options you will first have to analyze your financial situation. How much capital are you willing to invest in the beginning? It is a major question that is posed to every businessman at the initial stage.
The answer to this question will also decide the products that you will sell through your wholesale business. While considering the financial requirements you must also include the miscellaneous costs such as telephone, computer system, delivery vehicle, etc.
However, there are many ways to make your business cost-effective. Just like you can lease a space for a warehouse similarly you can collaborate with shipping companies such as FedEx for the delivery of your products without having to purchase a delivery vehicle or having a regular driver.
Moreover, you must also be sure about the time you are ready to devote to your business. For example, if you are doing a job you might only be looking after it part-time. Although full-time commitment is usually associated with speedy success you must remember that it requires at least 2-5 years to make a business profitable.
Once you are sure about which product you want to sell and how much time you are ready to invest the next step is to find reliable suppliers, who sell quality products at a reasonable price, and develop a good customer base.
When all your background work and checks are done you are finally ready to start your wholesale business. But, wait there are certain legal formalities you also need to take care of. For example, in India, you will have to obtain a trade license for your business that can be obtained from a local government body, and a GST registration is required for businesses that have a turnover of more than 20,00,000.
It is better to discuss this with a professional lawyer before you start so you can get all the necessary paperwork. Having all the legal formalities complete will not just leave you stress-free for the future but will also give you the confidence to move forward rapidly.
Once you start running the wholesale business your daily routine would include work such as sales and marketing operations, regularly contacting existing customers, processing orders, supporting dissatisfied customers, inventory control, etc. that require regular attention.
Having control of all these activities is the key to a successful wholesale business.
Who can be your customer?
As the customers form the foundation of any business you must specify your customer base beforehand. This will also help you to plan your business strategies well to meet their requirements and demands.
Moreover, remember the larger your customer base the more profitable your business gets. There are majorly three types of customer bases in any wholesale business. They are:
Retail businesses: These include retailers such as local shopkeepers, grocery stores, independent supermarkets, etc.
Retail distributors: These include distributors who can approach some retailers that may be unapproachable to you.
Other wholesale distributors: These may serve as your customers only when you have some exclusive contracts or limited deals in hand.
It is not necessary to choose only one of them as your customer, you can explore your opportunities while being in the market and escalate your customer base irrespective of their background.
Choosing the right product to sell
This is the most important question as the success of your wholesale business is completely dependent on choosing the right product at the right time for the right market.
Thorough market research is required to be done before you can finally answer this question. Moreover, you will need to pay attention to the right strategy of planning, price factor, and unique selling points.
Although the market keeps fluctuating but depending on our research here is the list of the 10 best wholesale products that can help you earn profit in the Indian market:
Organic foods
Homepage of One the Fast-Growing Organic Food Startups
With people becoming more and more health conscious the demand for organic food is rapidly increasing in the market. Although large numbers of people are already in this business there is still space for more.
Several new and old companies are entering this field owing to its recent attraction and these companies need distributors. This is where your role comes into the picture. You can approach these companies and help them create brand value for their products through your marketing and selling skills.
If you can capture the market this will help you grow as a wholesale distributor not just in the domestic but international market as well.
Agrochemical business
India is an agriculture-dominated country. Even today 54.6% of our total workforce is engaged in agricultural activities. This makes the wholesale distribution of agrochemicals a potential business opportunity.
The agriculture industry requires several pieces of equipment that can help you earn huge profits and opportunities. Then there are fertilizers, pesticides, insecticides, organic seeds, crops, and multiple other options to choose from.
If you have land near the countryside and the opportunity to start a wholesale business, investing in this industry can prove to be a breakthrough for you.
Furniture distribution
With the real estate business at its hype and an increasing number of startups and offices, furniture is in high demand. Moreover, owing to the post-pandemic era as most companies and offices are reopening they are looking for new interiors.
Therefore, this business may help you earn huge profits. Also, it is an easy-to-handle business that is required both in rural as well as urban areas.
Further, with the new advanced technology variety of furniture options are available in the market such as portable, multipurpose, all-in-one, etc. You can choose any of these options depending on the market where you want to sell your products.
Textile business
This business has the potential to create huge profit opportunities in the Indian market. There are a lot of products that you can sell to become a part of this wholesale business. For example, sewing machines, threads, textiles, readymade garments, accessories, safety clothing, upholstery, footwear, etc.
This business has served the old as well as new entrepreneurs to make their presence felt in the market.
However, initiating this business would require good field knowledge and preferably some job experience in the same field.
Jewelry business
Although this business would require a large amount of initial capital investment, it is one of the evergreen business options.
This would also require you to build a spotless image that can be trusted by your customers. Being a costly item people usually prefer to buy it from renowned sellers. This would also need a huge client base.
Ayurvedic medicine
Homepage of One the Wellness Food Startups in India
This is one of the most high-demand businesses. Today, people are turning towards yoga and Ayurveda for most of their health issues. Allopathic doctors are only consulted in the time of emergency.
This makes the ayurvedic medicine business one of the most profitable in recent times. Several companies are selling ayurvedic products ranging from medicines to haircare, skincare, and groceries. Also, there are categories like luxury products, pocket-friendly items, etc.
All these companies require good retailers who can help them reach their products to customers and establish them as trustworthy brands. Considering all this ayurvedic medicine business can be a great business opportunity.
Stationery business
Whether it is a school, college, or even a corporate house, stationery items are required everywhere. This is also one of the most profitable wholesale businesses in the market. Moreover, it does not require much investment.
To run a profitable business you will have to select your target market and sell the products to their needs.
The demand for toys may change with time and age but you have to select the target customer you want to cater to. You will have to find the right manufacturers producing good quality products and then bring them to the market for your customers.
These products have a huge profit margin and are always in demand. Therefore, wholesale distribution of children’s toys is an area full of opportunities.
Snacks
Just like toys, this is also a large and always in-demand market. There are a variety of snack options available in the market which are consumed by people of every age.
Health-conscious people may go for baked or non-fried snacks, children may prefer a different variety. But the market is large and so is the opportunity.
If you can choose the right snacks that are liked by your target customers, your business can flourish in no time.
Kitchenwares
Homepage of One the Top Home Appliances Brands in India
The kitchen is the essence of every household, and every kitchen requires utensils such as pans, cookers, serving dishes, crockery, etc. There are a variety of items that can be sold.
You have to find quality products for your customers and make them available at attractive prices or with offers they cannot resist.
Conclusion
Wholesale distribution is a timeless business that can be profitable provided that you can choose your product and industry well. Also, having reliable suppliers and a good customer base is a must for the wholesale business.
Also, you should have great negotiation skills along with the ability to find the next best product before your competitors. Good operational and management skills will help you make your mark in this field.
Finally, if you work hard, can choose the right product, and craft deals that are loved by your customers, your wholesale business is sure to succeed.
FAQs
How do I start my own wholesale business?
First of all, analyze your financial situation. Having a good knowledge of sales and marketing is an added advantage. You must also be sure about the time you are ready to devote to your business.
If you start from scratch, you will have to put energy into establishing a warehouse, finding the right product, choosing the buyers and sellers, etc. If you are ready to take the risk and have enough money, you can buy an existing business or a business opportunity.
Is wholesale a profitable business?
Yes, wholesale is a profitable business if you do it right. In August 2022, total wholesaler sales in the US amounted to an estimated value of almost $700 billion, which is an increase of about $100 billion year-on-year.
What are the skills required to start a wholesale distribution business?
Here are some of the skills required to start a wholesale distribution business:
Great negotiation skills
The ability to find the next bestseller before anyone else
Amazing salesmanship to make a deal appear irresistible to your customers.
Good operational and management skills, especially to handle backend activities such as warehouse setup and organization, shipping and receiving, etc.
Chayanika Goswami
