Flair Writing Industries’ Initial Public Offering (IPO) has garnered significant interest from investors on its first day, signaling strong demand for the Mumbai-based stationery maker’s shares. The company has set the price band for the IPO at ₹288 to ₹304 per share, and investors can bid for a minimum of 49 equity shares and in multiples of 49 equity shares thereafter.
The IPO, which opened for subscription on November 22 and will close on November 24, aims to raise up to ₹593 crore. At the end of the first day, the issue was oversubscribed two times, with non-institutional and retail investors showing strong interest, while qualified institutional buyers (QIBs) lagged slightly behind.
Flair Writing Industries has already raised ₹177 crore from 23 anchor investors, including SBI Consumption Opportunities Fund, HDFC Mutual Fund, and Aditya Birla Sun Life. The company manufactures and sells the popular Flair brand of pens and holds rights to international brands like Hauser and Pierre Cardin’s writing instruments. Its products are distributed to 3.15 lakh wholesalers and retailers.
The IPO comprises a fresh issue of ₹292 crore and an offer for sale of ₹301 crore. The net proceeds from the fresh issue will be used to establish a new manufacturing facility for writing instruments in Valsad, Gujarat, as well as to fund capex, working capital requirements, loan payments, and other expenses.
Flair Writing Industries has seen strong revenue growth, with revenues increasing at a compounded annual growth rate (CAGR) of 22.85% from FY21 to FY23. The company’s net profit nearly doubled in FY23 compared to the previous year.
Despite its strong performance, the company has outlined potential risk factors in its RHP, including plant shutdowns, challenges in executing expansion plans, labor unrest, and regulatory issues. Increased competition in the writing instrument space could also impact its business.
In light of its financial performance and growth prospects, Kunvarji Wealth Solutions has given a ‘subscribe’ rating to the IPO, noting that the company’s operating margin increased and stood at 19.47% in FY23. The company is confident in its ability to maintain its historical growth rates, despite potential challenges.