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Flair Writing lists at a 65% premium; opens at Rs 503 per share on the BSE

01 December 20235 mins read by Angel One
The IPO witnessed an impressive response, especially compared to other recently-listed IPOs, with a subscription rate of 49.28 times.
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Flair Writing Industries (Flair) is engaged in the development and manufacturing of writing instruments, securing a position among the top three players in the entirety of the writing instruments industry, debuted on the Indian stock market today.

Upon its debut on the BSE, the stock opened at Rs 503 per share, reflecting an impressive 65.46% premium compared to the issue price of Rs 304 per share from its initial public offering. Conversely, on the NSE, the stock debuted at Rs 501 per share, indicating a 64.8% premium. The company’s present market capitalisation stands at Rs 5,301 crore.

The book-running lead managers for the IPO were Nuvama Wealth Management Limited and Axis Capital Limited. Additionally, Link Intime India Private Limited is the issue’s registrar.

IPO Proceeds: 

The company intends to utilize the net proceeds from the issue for the following purposes: Setting up a new manufacturing facility for writing instruments in District Valsad, Gujarat (New Valsad Unit); funding the capital expenditure of the company and its subsidiary, FWEPL; funding the working capital requirements of the company and its subsidiaries, FWEPL and FCIPL; repayment or prepayment, in part or in full, of certain borrowings availed by the company and its subsidiaries, FWEPL and FCIPL; and lastly, for general corporate purposes.

Company profile

Flair is engaged in crafting writing instruments tailored to meet the evolving demands of today’s dynamic market. Moreover, it upholds global business and societal standards.

With established partnerships with prominent figures in the writing industry, Flair owns multiple brands, including Flair, Hauser, Pierre Cardin, Flair Creative, Flair Houseware, and ZOOX. In FY23 the company achieved sales of 1,303.60 million units of pens. Of this total, 975.30 million units, constituting 74.82% of sales, were distributed domestically, while 328.30 million units, accounting for 25.18%, were exported worldwide.

Expanding its portfolio, the company has recently diversified into manufacturing an array of houseware products, including casseroles, bottles, storage containers, serving solutions, cleaning products, baskets, and paper bins. This expansion was facilitated through one of its subsidiaries, FWEPL.

Subscription details 

On November 24, 2023, the final day of the IPO window, the IPO witnessed an impressive response, especially when compared to other IPOs recently listed, with a subscription rate of 49.28 times. The public issue received moderate interest, with the retail category being subscribed 13.73 times, the QIB category achieving a subscription rate of 122.02 times, and the NII category reaching a subscription rate of 35.23 times.

The company attracted Rs 177.90 crore from various anchor investors by allocating 58.51 lakh equity shares at Rs 304 per share. The complete lock-in period for these anchor investors ends on April 4, 2024.

The IPO price range was set between Rs 288 and Rs 304, with a face value of Rs 5 per share and a lot size of 49 shares. The total size of the company’s IPO was Rs 593 crore, and the final share issue price was fixed at Rs 304 each.

Financial Performance

Particulars FY22 (Rs Cr)  FY23 (Rs Cr)  Q1 FY24 (Rs Cr) 
Revenue 587.64 954.29 248.50
Net Profit / (Loss) 55.15 118.10 32.14
Total Assets 557.49 684.18 765.04
Net Worth 319.86 437.99 470.16
Borrowings 126.33 115.59 126.67

Conclusion: 

The key dilemma for investors lies in whether to hold onto their shares. Those who applied for the IPO solely to capitalise on listing gains have already gained an impressive 65% return over its final issue price on the listing day itself. Investors who applied for the IPO purely for listing gains may consider closing their positions.

Conversely, investors with a higher risk tolerance might opt to hold onto their shares for the medium to long term, as this strategy could potentially yield benefits over time.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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