Flair Writing Industries shares list at 65% premium over IPO price

Pen maker Flair Writing Industries, which recently diversified into housewares, steel bottles and appliances, made a strong debut on the stock exchanges on Friday, with the share price listing at 65% premium over the initial public offering (IPO) price. On the Bombay Stock Exchange (BSE), the stock opened at ₹503 against the issue of ₹304 per share. On the NSE, the shares of the writing instruments manufacturing company listed at ₹501, up 64.8% over the IPO price.

Post listing, Flair shares rose 69% to ₹514 on the BSE, while the market capitalisation climbed to ₹4,780 crore. On the NSE, the stock touched a high and low of ₹514.40 and ₹450.90, respectively in the first half an hour of trade so far.

Ahead of the listing, Flair's grey market premium (GMP) increased 49% over the IPO price to ₹150 in the unlisted market, indicating a listing price of ₹454 per share. 

According to domestic brokerage Swastika Investmart, the listing was even above expectations, given the strong fundamentals of the company and the positive investor sentiment surrounding the IPO. “Flair Writing is a leading manufacturer of writing instruments in India with a well-diversified product portfolio and a strong brand reputation. The company has a proven track record of growth and profitability. The IPO was oversubscribed 49.28 times, indicating strong investor interest,” says Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.  

“Overall, Flair Writing Industries Ltd. is a fundamentally sound company with a strong growth outlook,” she adds.

The ₹593 crore public issue of Flair Writing Industries, which opened for subscription along with four other main board IPOs including Tata Technologies, IREDA, Fedbank Financial Services, and Gandhar Oil Refinery India, managed to garner good response from investors despite strong demand for Tata group shares.

The issue, having a price range of ₹288 to ₹304 per share, was subscribed 46.8 times, which opened for subscription between November 22-24. The public offer received 122 times bids from qualified institutional buyers (QIBs), while the part reserved for non-institutional investors (NIIs) and retail investors was subscribed 35.2 times and 13.7 times, respectively.

The IPO of the pen and writing instruments maker was a mixture of fresh equity shares worth ₹292 crore and an offer for sale (OFS) of ₹301 crore by the existing shareholders.

Owner of over 45 year old flagship brand “Flair”, the homegrown company proposes to utilise the net proceeds of the fresh issue for setting up a new manufacturing facility for writing instruments in Valsad district in Gujarat. The firm intends to use part of the capital for funding capital expenditure as well as for loan repayment of the company and its subsidiaries, Flair Writing Equipments (FWEPL) and Flair Cyrosil Industries (FCIPL). The fund will be also used to meet general corporate purposes.

Flair is the largest player in the pens segment with a revenue of ₹754.18 crore in financial year 2023 from the pens writing instruments business in India, as per a CRISIL report. It holds a market share of approximately 9% in India's overall writing and creative instruments industry, as of March 31, 2023. Besides, the company is among the top three players in the overall writing instruments industry with a revenue of ₹915.55 crore in FY23. 

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