Flair Writing Industries IPO: The initial public offering (IPO) of pen maker Flair Writing Industries Ltd, which was opened for public subscription on Wednesday, has been subscribed fully subscribed till 1 pm on the first day of bidding. So far, the 593-crore IPO has been subscribed 1.06 times, receiving bids for 1,53,16,910 shares as against 1,44,13,188 shares on the offer.
The category for non-institutional investors has been subscribed 100 per cent, while the portion for retail individual investors (RIIs) received 1.40 times subscription. The quota for qualified institutional buyers (QIBs) was subscribed 51 per cent.
The IPO allotment will take place on November 30, while the share listing might take place on December 5.
Flair Writing Industries IPO GMP
According to market observers, unlisted shares of Flair Writing Industries were trading Rs 60 higher in the grey market as compared with its issue price. The Rs 60 grey market premium or GMP means the grey market is expecting a 19.74 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Flair Writing Industries IPO: Should You Subscribe?
Giving the ‘subscribe for long term’ rating, brokerage Anand Rathi in its note said, “On the valuation front, we believe that the company is fairly priced. Thus, we recommend a ‘Subscribe – Long Term’ rating to the IPO.”
It said Flair Writing commands a strong position as one of the top three players in India’s writing instruments industry, boasting consistent revenue growth, a diversified product range, and a significant international footprint.
Another brokerage Ventura Securities said, “Indian writing and creative industry is expected to grow at a CAGR of 7.7-8.4 per cent over FY2023-28 and the steel bottle industry is expected to grow at 14-16 per cent over FY2023-28. Flair is going to benefit from these prospects. At the IPO price of Rs 304, Flair is valued at a PE of 27 times as compared to industry average of 45 times.
It has also given ‘Subscribe’ recommendation for the IPO.
Flair Writing Industries IPO: Price, Lot Size
Flair Writing’s IPO comprises a fresh issue of equity shares aggregating up to Rs 292 crore and an offer-for-sale (OFS) of equity shares worth up to Rs 301 crore by promoters and promoter group entities. Currently, promoters and promoter group entities own 100 per cent stake in the company.
Flair Writing Industries Ltd has set a price band of Rs 288-304 a share for its IPO. The minimum lot size for an application is 49 shares. The minimum amount of investment required by retail investors is Rs 14,896. The minimum lot size investment for NII is 14 lots (686 shares), amounting to Rs 208,544, and for NII, it is 68 lots (3,332 shares), amounting to Rs 1,012,928.
Ahead of its initial public offering, Flair Writing Industries Ltd has mopped up Rs 178 crore from anchor investors. The company has allocated 58.52 lakh equity shares to 23 funds at Rs 304 apiece, which is also the upper end of the price band.
Those that participated in the anchor book include — SBI Mutual Fund (MF), Aditya Birla Sun Life MF, Tata MF, ICICI Prudential Life Insurance Company, SBI Life Insurance Company, Troo Capital and Winro Commercial (India) Ltd.
The proceeds of the fresh issue will be used for setting up a manufacturing facility for writing instruments at Valsad district in Gujarat; funding the company’s capital expenditure and subsidiary Flair Writing Equipments Pvt Ltd (FWEPL).
Besides, the proceeds will also be used to support the working capital requirements of the company and subsidiaries FWEPL and Flair Cyrosil Industries. Also, the money will be used for payment of the loan and general corporate purposes. The company, which owns the over 45-year-old flagship brand ‘Flair’, is among the top three players in the overall writing instruments industry with a market share of about 9 per cent as of March 2023.
It manufactures and distributes writing instruments, including pens, stationery products, and calculators, and has also diversified into manufacturing houseware products and steel bottles. Nuvama Wealth Management Ltd (formerly known as Edelweiss Securities Ltd) and Axis Capital Ltd are the book-running lead managers to the IPO.