Flair Writing IPO subscribed 4.6x on Day 2 so far; NIIs lead bidding

The initial public offering (IPO) of Flair Writing Industries saw a strong buying interest from the investors during the initial two hours of the bidding on day one. The stationary products maker's primary offering kicked off-for subscription on Wednesday, November 22.

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 and its multiples thereof. The issue has a fresh share sale component of 292 crore and 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 6,60,07,753 equity shares, or 4.58 times, compared to the 1,44,13,188 equity shares offered for the subscription by 2.30 pm on Thursday, November 23. The three-day bidding will conclude tomorrow, that is, Friday, November 24.

The portion reserved for non-institutional investors (NIIs) was subscribed 7.07 times, while the allocation for retail investors saw a subscription of 5.72 times. The quota set aside for qualified institutional bidders (QIBs) was subscribed 73 per cent 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 Writing Instruments is one of the leading companies in the industry with a domestic market share of 9 per cent. The company has outperformed industry with a revenue growth at 14 per cent CAGR between FY17-23, said Nirmal Bang Securities in its IPO note.

"Flair has delivered a healthy performance in FY23 with 19.5 percent of operating margin which is best in the industry. Also, ROE and ROCE stood at 27.1 per cent and 30.5 per cent in FY23 which is well above peer performance. The issue is valued at 27x to FY23 EPS which is at discount to its peers. Thus, we recommend 'subscribe' to the issue," it said.

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.

Revenue and PAT has increased with a CAGR of 14 per cent and 15 per cent for FY2017-23. It has witnessed faster growth of 14 per cent CAGR as compared to industry growth of 5.5 per cent for FY17-23. This issue is available at P/EPS of 24 times for FY2023 which appears fairly priced with peers, said Canara Bank Securities, with a subscribe rating for the isuse

 

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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