Flair Writing Industries, a Mumbai-based stationery maker, is set to launch its initial public offering (IPO) from November 22 to November 24. The company has set a price band of ₹288-304 for the issue, with the intention of raising up to ₹593 crore. The IPO will consist of a fresh issue of ₹292 crore and an offer for sale of ₹301 crore. Proceeds from the IPO will be used to establish a new manufacturing facility for writing instruments in Valsad, Gujarat, as well as to fund other expansion plans, working capital requirements, loan payments, and more.
In addition to manufacturing and selling the Flair brand of pens, the company also holds rights to international brands like Hauser and Pierre Cardin’s writing instruments. With products reaching 3.15 lakh wholesalers and retailers, Flair Writing Industries is looking to expand its manufacturing capacities and venture into other areas such as houseware, school supplies, and office supplies.
The company is also eyeing increased exports, with a current market share of 7.1% in the export of writing and creative instruments industry in FY23. Flair Writing Industries is hoping to benefit from the China +1 strategy adopted by many international companies.
Sumit Rathod, whole time director at Flair Writing Industries, stated, “We have received feedback from many international OEMs to make vacuum bottles and more such. It’s a good business which can add to our topline and bottomline both.”
Financially, the company’s revenues have shown a compounded annual growth rate (CAGR) of 22.85% from FY21 to FY23. Its net profit nearly doubled in FY23 compared to the previous year, with operating margins moving upward to 19.47%. The company’s peers in the market include Cello World, Linc, and Kokuyo Camlin. However, the company is also aware of risks such as plant shutdowns, labor unrests, and regulatory issues which are highlighted in its RHP (Red Herring Prospectus).
Moreover, the competition among organized and unorganized players in the writing instrument space remains a challenge, as retailers sometimes offer products from local or unbranded manufacturers at lower prices. The company recognizes that its inability to adequately address these competitive pressures could have a material impact on its business.
In summary, Flair Writing Industries is making significant strides in the stationery and writing instruments industry, but the IPO will also serve to fund its further expansion and diversification plans. With its growth trajectory and strategic expansion initiatives, the company is certainly a contender in the market.
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