Flair Writing IPO subscribed 14.9 times on Day 3 so far; issue closes today

The initial public offering (IPO) of Flair Writing Industries saw a strong buying interest from the investors during the third and final day of the bidding process. The stationary products maker's primary offering was booked 2.18 times on day one and ended second day of the bidding with 6.12 times subscription

Flair Writing Industries is raising a total of Rs 593 crore via its initial stake sale in the fixed price band of Rs 288-304 per share in the lot size of 49 equity shares. The issue has a fresh share sale component of 292 crore and remaining part is an offer-for-sale (OFS) of up to 99,01,315 shares amounting to Rs 301 crore.

According to the data, the investors made bids for 21,43,45,453 equity shares, or 14.91 times, compared to the 1,44,13,188 equity shares offered for the subscription by 1.15 pm on Friday, November 24. The three-day bidding for the issue opened on Wednesday, November 22 and will conclude today, that is, Friday, November 24.

The portion reserved for non-institutional investors (NIIs) was subscribed 21.58 times, while the allocation for qualified institutional bidders (QIBs) saw a subscription of 17.88 times. The quota set aside for retail investors was subscribed 10.27 times as of the same time.

Brokerage firms tracking the IPO are mostly positive on the issue and are suggesting to subscribe to it. They are positive on the company's strong financials, big market share in India and globally, growth prospects and years of experience in the business.

Flair 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. With over 45 years of market presence, its flagship brand 'Flair' reflects stability, and the company maintains the largest distribution network in the country, said Anand Rathi Research.

"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 ₹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," it said with a 'subscribe' rating for the issue.

Flair Writing Industries raised Rs 177.9 crore from anchor investors as the company allocated 58,51,972 equity shares at Rs 304 per share. Nuvama Wealth Management and Axis Capital are the lead managers of the Flair Writing Industries IPO, while Link Intime India is the registrar for the issue.

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. Further, new product launches with innovative designs are likely to improve the blended pens realizations, said Choice Broking.

"Moreover, 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 of 50.1 times," it added with a 'subscribe' rating for the issue.
 

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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