Cello World

Well-established brand name and strong market positions.

Diversified product portfolio across price points catering to diverse consumer requirements.

Track record of scaling up new businesses and product categories.

Pan-India distribution network with a presence across multiple channels.

Ability to manufacture a diverse range of products and maintain optimal inventory levels.

Skilled and experienced management team.

Strong historical financial results.

Fluctuations in raw material prices, especially plastic granules and plastic polymer prices, and disruptions in their availability may have an adverse effect on its business, results of operations, financial condition and cash flows.

The company is dependent on its distribution network in India and overseas to sell and distribute its products and any disruption in the company distribution network could have an adverse effect on its business, results of operations, financial condition and cash flows.

Its reliance on third-party contract manufacturers for some of its products subjects it to risks, which, if realized, could adversely affect its business, results of operations, financial condition and cash flows.

The company does not own the trademark for its key brands, including "Cello", "Unomax", "Kleeno", "Puro" and their respective logos. Further, the "Cello" brand name is also used by one of its competitors for its writing instruments business.

The company face significant competition which may lead to a reduction in its market share, cause it to increase the company expenditure on advertising and marketing as well as cause it to offer discounts, which may result in an adverse effect on its business, results of operations, financial condition and cash flows.

The brands that the company use and its reputation are critical to the success of the business and may be adversely affected due to various reasons.

The company Promoters along with members of the Promoter Group will continue to retain a significant shareholding in it after this Offer, which will allow them to exercise significant influence over it and any substantial change in the Promoters` shareholding may have an impact on the trading price of the company Equity Shares which could have an adverse effect on its business, results of operations, financial condition and cash flows.

If the company is unable to identify consumer demand accurately and maintain an optimal level of inventory, its business, results of operations, financial condition and cash flows.

The company`s business is subject to seasonality, which may contribute to fluctuations in its results of operations and financial condition.

The company may encounter delays in the construction of its glassware manufacturing facility in Rajasthan, which is currently under construction ("Rajasthan Glassware Unit"). Further, upon construction of the Rajasthan Glassware Unit, its may also not be able to ramp up production in a timely manner and maintain good quality control standards at the Rajasthan Glassware Unit.

If the company fail to identify and effectively respond to changing consumer preferences in a timely manner, the demand for its products could decrease, causing the company business, results of operations, financial condition and cash flows to be adversely affected.

The launch of new products and range of products that prove to be unsuccessful could affect the company growth plans which could adversely affect its business, results of operations, financial condition and cash flows.

If the company fail to obtain, maintain or renew the statutory and regulatory licenses, permits and approvals required for its business and operations, the company business, results of operations, financial condition and cash flows may be adversely affected.

The company has entered into, and will continue to enter into related party transactions. Its cannot assure you that such transactions, individually or in the aggregate, will not have an adverse effect on its business, results of operations, financial condition and cash flows.

If the company is unable to maintain the existing level of capacity utilisation rate at its manufacturing facilities, the company margins and profitability may be adversely affected. Further, a slowdown or shutdown in its manufacturing operations could have an adverse effect on the the company business, results of operations, financial condition and cash flows.

Product recalls may have an adverse effect on the company reputation, business, results of operations, financial condition and cash flows.

Non-compliance with and changes in, safety, environmental and labour laws and other applicable regulations, may adversely affect the company operations. Further, an increase in labour costs may adversely affect its business, results of operations, financial condition and cash flows.

The company`s business may be adversely impacted by sale of counterfeit products and passing-off which may reduce its sales and harm the company brands, adversely affecting its results of operations, financial condition and cash flows.

The company have contingent liabilities and commitments, and its financial condition could be adversely affected if these contingent liabilities or commitments materialize.

One of the company Material Subsidiaries, Wim Plast Limited, is required to publish financial information, including for periods other than those covered by the Restated Consolidated Financial Information. Such financial information published by Wim Plast Limited is not comparable to the Restated Consolidated Financial Information and may not be indicative of its financial performance for such periods.

The success of the company business depends substantially on its management team and operational workforce. The company inability to attract or retain such manpower could adversely affect its business and operations.

The company appoint contract labour for carrying out certain of its operations and the company may be held responsible for paying the wages of such workers, if the independent contractors through whom such workers are hired default on their obligations, and such obligations could have an adverse effect on its results of operations and financial condition.

Significant disruptions of information technology systems or breaches of data security could have an adverse effect on its business, results of operations, financial condition and cash flows.

The company has issued Equity Shares during the preceding one year at a price that may be below the Offer Price.

The company has entered into Shareholders` Agreement under which certain Shareholders of the Company namely, India Advantage Fund S4 I (IDBI Trusteeship Services Limited acting as the trustee) and India Advantage Fund S5 I (IDBI Trusteeship Services Limited acting as the trustee), and the Promoters will continue to have board nomination rights, subject to applicable laws and Shareholders` approval post the listing of the Equity Shares.

The company cannot assure payment of dividends on the Equity Shares in the future and its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements, capital expenditures and restrictive covenants of the company financing arrangements.

The company may be unable to manage the integration or fully realize the anticipated benefits of the acquisition of Wim Plast Limited and the reorganization of the Group.

The company track certain operational and key business metrics with internal systems and tools. Certain of its operational metrics are subject to inherent challenges in measurement which may adversely affect the company business and reputation.

The company Registered Office and certain manufacturing facilities are situated on lands/in buildings that are not owned by it. In the event that its lose such rights or are required to renegotiate arrangements for such rights, the company business, results of operations, financial condition and cash flows may be adversely affected.

The company operations could be adversely affected by strikes or labour unrest.

There is outstanding litigation pending against it, the company Promoters, Directors, the its Subsidiaries and the Group Companies which, if determined adversely, could affect its business, results of operations, cash flows and financial condition.

Information relating to the historical capacity of the company manufacturing facilities included in this Draft Red Herring Prospectus is based on various assumptions and estimates and future production and capacity may vary.

The company may not be sufficiently protected or insured for certain losses that its may incur or claims that the company may face against it.

The company relies on its relationships with third-party e-commerce marketplaces for sales through the company online channel.

Any international market expansion efforts may expose it to complex management, legal, tax and economic risks, which could adversely affect the company business, financial condition, cash flows and results of operations.

This Draft Red Herring Prospectus contains information from third parties, including an industry report prepared by an independent third-party research agency, Technopak Advisors Private Limited ("Technopak"), which the company has commissioned and paid for purposes of confirming its understanding of the industry exclusively in connection with the Offer.

The company Promoters and Directors may have interests other than the reimbursement of expenses incurred and receipt of remuneration or benefits from the Company.

The company has availed unsecured loans from Promoters and members of Promoter Group that are recallable, at any time.

Its ability to raise foreign capital may be constrained by Indian law, since its business is categorized as business under wholesale/cash and carry and single brand retail business for the purposes of foreign direct investment ("FDI").

There are certain instances of delays in payment of statutory dues by it. Any further delays in payment of statutory dues may attract financial penalties from the respective government authorities and in turn may have a material adverse impact on the company financial condition and cash flows.

The Company will not receive any proceeds from the Offer. The proceeds from the Offer shall be received directly by the Selling Shareholders.