Mumbai-based stationery maker Flair Writing Industries Ltd. has made a strong debut in the public market as its initial public offer (IPO) was subscribed two times at the end of the first day of trading. The company, which manufactures and sells the popular Flair brand of pens, as well as international brands like Hauser and Pierre Cardin, opened its IPO for subscription on November 22, with the issue set to close on November 24.
Flair Writing has fix the price band for the issue at ₹288 to ₹304 per share, with the goal of raising as much as ₹593 crore through the IPO. Investors can bid for a minimum of 49 equity shares and in multiples thereafter. The IPO has already attracted strong interest, particularly from non-institutional and retail investors, while qualified institutional buyers (QIBs) have been slightly less enthusiastic.
The company has raised ₹177 crore from 23 anchor investors, including SBI Consumption Opportunities Fund, HDFC Mutual Fund, and Aditya Birla Sun Life. The issue 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, with the remainder allocated to fund capital expenditures, working capital requirements, loan payments, and other purposes.
Flair Writing has reported strong growth in revenues, with a compounded annual growth rate (CAGR) of 22.85% from FY21 to FY23, and a nearly doubled net profit in FY23 compared to the previous year. The company is optimistic about its future growth prospects, despite potential risks related to plant shutdowns, expansion plans, labor unrest, and regulatory issues, as well as increased competition in the writing instrument market.
The IPO received a ‘subscribe’ rating from Kunvarji Wealth Solutions, with the report noting that the company’s operating margin increased and its EBITDA margins stood at 19.47% in FY23. Flair Writing’s products currently reach 3.15 lakh wholesalers and retailers, and it is confident in its ability to continue outperforming the market and maintaining historical growth rates. The IPO is seen as a significant opportunity for investors who are looking to capitalize on the company’s success in the stationery industry.
