In the bustling financial world, Mumbai-based stationery giant Flair Writing is making waves with its ₹593 crore Initial Public Offering (IPO). The response has been impressive, with the subscription reaching twice its initial offering on the first day.
Let’s delve into the details and understand what’s fuelling this surge of interest.
IPO Details
| IPO Open Date | Wednesday, November 22, 2023 |
| IPO Close Date | Friday, November 24, 2023 |
| Price Band | ₹288 to 304 per share |
| Lot Size | 49 shares per lot |
| Issue Size | 529 cr (Fresh Issue 292.00 Cr & OFS 301.00 Cr) |
| Basis of Allotment | Thursday, November 30, 2023 |
| Initiation of Refunds | Friday, December 1, 2023 |
| Credit of Shares to Demat | Monday, December 4, 2023 |
| Listing Date | Tuesday, December 5, 2023 |
Flair Writing Subscription Status
The IPO opened its doors on November 22 and is set to close on November 24. The Flair Writing IPO was subscribed 2.99 times on the first day. The public issue subscribed 3.95 times in the retail category, 0.56 times in QIB, and 4.00 times in the NII category by November 23, 2023, 11:00:00 AM.
Investors are eyeing a piece of the pie with a price band ranging from ₹288 to ₹304 per share. The company aims to raise a whopping ₹593 crore through this offering.
Flair Writing’s IPO has witnessed strong interest from non-institutional and retail investors. However, qualified institutional buyers (QIBs) seem to be trailing slightly in the race. The dynamics between these investor categories will likely shape the IPO’s trajectory. Flair Writing’s IPO GMP is +71 today, indicating a premium of ₹71 per share.
Anchor Investors
Before the IPO frenzy kicked in, Flair Writing secured ₹177 crore from 23 anchor investors. Notable names such as SBI Consumption Opportunities Fund, HDFC Mutual Fund, and Aditya Birla Sun Life
Objectives of the Issue
The IPO structure includes fresh issues amounting to ₹292 crore and an offer to sell ₹301 crore. The net proceeds will fund a new manufacturing facility in Valsad, Gujarat, address financial needs like Capex and working capital management loan payments, and address general corporate purposes.
About Flair Writing Industries Limited
Incorporated in 1976, Flair has evolved with the market’s ever-changing demands. It adheres to global business and social norms as an ISO 9001:2015 and ISO 14001:2015 certified entity with a reach of 3.15 lakh wholesalers and retailers.
Flair’s products, including Flair, Hauser, Pierre Cardin, Flair Creative, Flair Houseware, and Zoox, are not limited to domestic sales. In FY2023, the company exported 25.18% of its 1,303.60 million units globally. Recent ventures into houseware products, facilitated by subsidiaries like FWEPL, showcase Flair’s dynamic expansion.
Revenue Details
The company’s revenues have surged at a CAGR of 22.85% from FY21 to FY23, with a nearly doubled net profit in FY23. To understand the company a little more, check the DRHP here.
| Period Ended | 30 Jun 2023 (cr) | 31 Mar 2023 (cr) | 31 Mar 2022 (cr) | 31 Mar 2021 (cr) |
| Assets | 765.04 | 684.18 | 557.49 | 480.66 |
| Revenue | 248.50 | 954.29 | 587.64 | 310.87 |
| Profit After Tax | 32.14 | 118.10 | 55.15 | 0.99 |
| Net Worth | 470.16 | 437.99 | 319.86 | 264.65 |
| Reserves and Surplus | 423.46 | 391.29 | 296.50 | 241.31 |
| Total Borrowing | 126.67 | 115.59 | 126.33 | 130.31 |
Challenges on the Horizon
Flair faces pitfalls such as plant shutdowns, expansion hurdles, labor unrest, and regulatory challenges. Increased competition in the writing instrument space, with organized players holding 78-80% market share, also poses a significant risk.
As of FY2023, CRISIL reported that organized players dominated 78-80% of the writing instrument market. Flair’s ability to navigate this competitive landscape will be crucial for its future success.
What’s Next?
Flair Writing’s IPO is capturing the market’s attention for all the right reasons. The company is poised for significant growth with a rich history, a diversified product portfolio, and a strategic plan for the IPO’s net proceeds. However, key challenges will be navigating the identified risks and sustaining its historical growth rates.
FAQs
What is the subscription status of Flair Writing’s IPO?
The IPO received a strong response, being subscribed 2.99 times at the end of day one.
How will the net proceeds from the IPO be utilized?
The funds will be allocated to set up a new manufacturing facility, support capital expenditure, address working capital requirements, manage loan payments, and cater to general corporate purposes.
Who are the anchor investors in Flair Writing’s IPO?
Anchor investors include SBI Consumption Opportunities Fund, HDFC Mutual Fund, and Aditya Birla Sun Life.
What international brands does Flair Writing own?
Flair has acquired rights to international brands like Hauser and Pierre Cardin’s writing instruments.
What are the identified risks mentioned by Flair Writing in its IPO documents?
Risks include plant shutdowns, expansion challenges, labor unrest, regulatory issues, and increased competition in the writing instrument space.
