IPO listed on 1 Dec'23
Flair Writing Industries Ltd
Minimum Investment
₹ 14,896 / 49 shares
Grey market premium
₹ 60 (20% premium)
Issue price
₹ 304
Listing price
₹ 470
Listing gains
166 (55%)
Listing on
Dec 01, 2023
Our Verdict:
Subscribe
- In terms of valuation, the IPO seems reasonably priced with a P/E ratio of 25x on FY24's projected earnings. Additionally, the grey market premium for the issue suggests a premium listing.
- Compared to its competitors, Flair's P/E ratio is more favourable, especially considering its higher profitability and return metrics. Its ranking among the top three players in India, consistent growth in revenue, diverse products, and international presence further strengthen its appeal.
- Given its competitive pricing and potential for significant growth driven by upscale trends in the pen industry and expansion into new markets like art, hobby, houseware, and steel bottles, it is recommended for investors to consider subscribing to this offering from a long-term perspective.
About the company
Founded in
6 Jan'86
Managing director
Vimalchand Jugraj Rathod
Flair Writing Industries Ltd (Flair) is India's oldest pen company and among the top three writing instrument manufacturers. It has consistently outpaced industry growth from FY17 to FY23.
The company produces a diverse range of writing instruments, stationery, and calculators. With 727 products as of June 2023, Flair offers a wide selection across various brands and price points, boasting the largest distribution network among India's organized sector.
Recently, Flair expanded into steel bottle manufacturing and other household items like storage containers and cleaning solutions under the brands Flair Hauser, Pierre Cardin, and ZOOX, broadening its market reach.
STRENGTHS
- Dominance in Market: Flair is a major player in the writing instruments industry, holding ~9% of the local market share. The flagship brand ‘Flair’ has been established for over 45 years, underlining its enduring presence and trust among consumers.
- Robust Financial Growth: Between FY21 and FY23, the firm saw substantial growth with Revenue from Operations escalating at a 78% CAGR. Similarly, EBITDA and Net Profit surged at 182% CAGR and 993% CAGR respectively.
- Enhanced Profitability: The firm witnessed a notable increase in operating margins, climbing from 7.72% in FY21 to 19.47% in FY23. Net profit margins also improved significantly from 0.33% to 12.53%.
- Impressive Returns: In FY23, Flair achieved a high Return on Equity of 31.17% and Return on Capital Employed stood at 31.24%.
- Reduced Leverage: The Debt-to-Equity Ratio of the company showed a consistent decline, moving from 0.49 in FY21 to 0.39 in FY22, and further down to 0.26 in FY21.
RISK FACTORS
- Extended Working Capital Days: Compared to its peers, Flair has higher working capital days. This is attributed to extended debtor days, due to additional credit provided to bolster its distribution channels, and an increased inventory resulting from a diverse range of products.
- Dependency on Crude Oil Prices: A significant part of Flair's raw materials is linked to crude oil. Consequently, any rise in crude oil prices could lead to escalated production costs, impacting the company's financial performance.
Issue details
Issue type
Mainstream
Issue size
₹ 593 crore
Fresh Issue
₹ 292 crore
OFS
₹ 301 crore
Price range
₹ 288 - 304
Lot size
49 shares
Issue Objective
The company intends to utilize the proceeds from the net issue towards:
- Setting up a new manufacturing facility for writing instruments in Valsad;
- Funding capital expenditure and working capital requirements of the company and its subsidiaries;
- Repayment/ prepayment of certain borrowings availed by the company and its subsidiaries; and
- General corporate purposes.
Dates
Bidding open
22 Nov'23
Bidding close
24 Nov'23
Allotment date
29 Nov'23
Refund date
29 Nov'23
Listing
1 Dec'23
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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