Incorporated in 1976, Flair Writing is engaged in developing and manufacturing writing instruments that are tailored to the continuously shifting market. 
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Incorporated in 1976, Flair Writing is engaged in developing and manufacturing writing instruments that are tailored to the continuously shifting market. Flair Writing Industries' initial public offering (IPO) will open for bidding on Wednesday, November 22. The stationary products maker will be selling its shares in the range of Rs 288-304 apiece and potential investors can bid for a minimum of one lot of Rs 49 equity shares and in multiples thereof. The IPO will conclude on Friday, November 24.
Incorporated in 1976, Flair Writing is engaged in developing and manufacturing writing instruments that are tailored to the continuously shifting market. Flair Writing is likely to raise a total of Rs 593 crore via IPO route, which included a fresh share sale of Rs 292 crore and offer for sale (OFS) of up to 9,901,315 equity shares amounting to Rs 301 crore by the promoters of the company.
The net proceeds from the issue would be utilised towards setting up a new manufacturing facility for writing instruments in Valsad, Gujarat; funding capital expenditure of the company and its subsidiary; funding working capital requirements of the company and subsidiaries; repayment/prepayment of certain borrowings; and general corporate purposes.
Flair Writing Industries raised Rs 177.90 crore from anchor investors, allocating 58,51,972 shares at Rs 304 per share. The Anchor book included names such as Theleme India Master Fund, Natixis International Funds, Troo Capital, Winro Commercial and a number of domestic mutual funds and insurance companies.
Flair owns several brands including Flair, Hauser, Pierre Cardin, Flair Creative, Flair Houseware, and Zoox. The company sold a total of 130.26 crore units of pens in the financial year 2022-23. It sold 97.53 crore units or 74.82 per cent in the domestic markets, while 32.83 crore units, or 25.18 per cent, units were exported globally.
The company has reserved 50 per cent shares for the qualified institutional bidders, while 15 per cent of shares shall be allocated to the non-institutional investors. Retail investors will get 35 per cent of shares reserved for them.
Nuvama Wealth Management and Axis Capital are the book running lead managers of the Flair Writing Industries IPO, while Link Intime India is the registrar for the issue. Shares of the company will be listed on both BSE and NSE. Here's what a host of brokerage firms say about the IPO of Flair Writing Technologies:
Anand Rathi Research
Rating: Subscribe
Flair Writing Instruments commands a strong position as one of the top 3 players in India’s writing instruments industry, boasting consistent revenue growth, a diversified product range, and a significant international footprint. Its flagship brand 'Flair' reflects stability, and the company maintains the largest distribution network in the country, said Anand Rathi.
Its business efficiency has been improved with existing products, resulting in bright prospects. At the upper price band, the company is valuing at P/E of 27.1 times with a market cap of Rs 3,204 crore post issue of equity shares and return on net worth of 31.1 per cent. “On the valuation front, we believe that the company is fairly priced, with a 'subscribe' rating,” the brokerage said.
StoxBox by BP Equities
Rating: Subscribe
The IPO of Flair Writing offers an attractive proposition, particularly considering the EPS of 12.66, resulting in a P/E ratio of 24.01 times. The valuation becomes compelling under the assumption of sustained profit growth and when factoring in the intrinsic value of the brand and premium valuation of the FMCG space. Flair emerges as a relatively secure investment opportunity with appealing valuations, said StoxBox. This brokerage has a ‘Subscribe’ rating on the issue.
Choice Broking
Rating: Subscribe
Choice Broking said Flair is one of the dominant players in the domestic writing instruments market. Going forward, the pens sales volume growth is likely to moderate, compared to the growth during FY 21-23, but will remain higher than volume growth reported during FY17-23. New product launches with innovative designs are likely to improve the blended pens realizations, said Choice Broking.
"Improved penetration of other products like creative stationery items, houseware and steel bottles will further boost the topline growth. At a higher price band, Flair is demanding a TTM P/E multiple of 27.1 times, which is at discount to the peer average. Thus, we are assigning a 'subscribe' rating for the issue," it said.
Reliance Securities
Rating: Subscribe
Flair has established a consistent track record of strong and consistent financial performance, with strong improvement in margins as FY21 was a washout year for writing instruments due to lockdown in schools and offices Revenues and PAT both have improved over the past few years and improvement in margins would continue with new products in various categories and individual strong brands at various price points pushing the growth trajectory in the coming years.
"Flair being one of the leaders in writing instruments both in domestic and exports market, industry leading profitability, experienced promoters by a strong professional team, faster growth of 14 per cent CAGR compared to 5.5% for industry for FY17-23, strong dominance in its categories, debt free are the key investment positives," it added with a subscribe rating for the issue.
Ventura Securities
Rating: Subscribe
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, Ventura recommended to 'subscribe' the IPO.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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