The initial public offering (IPO) of pen maker Flair Writing Industries Ltd will open for subscription on Wednesday (November 22), and will close on November 24. The anchor book for the ₹593-crore issue will open later in the day.

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According to market analysts, shares of Flair Writing Industries were commanding a premium of ₹60 in the grey market ahead of the issue opening.

The grey market is an unofficial market wherein the IPO shares can be bought and sold till the listing.

Analysts at Anand Rathi said that 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.

“On the valuation front, we believe that the company is fairly priced. Thus, we recommend a ‘Subscribe – Long Term’ rating to the IPO,” the brokerage said.

The price band for the IPO is ₹288-304 per share, and investors can bid for a minimum of 49 equity shares in one lot and in multiples of 49 shares thereafter.

Flair Writing plans to raise ₹593 crore via its IPO out of which fresh issue of equity shares of ₹292 crore will come into the company and an offer-for-sale (OFS) of ₹301 crore will be raised by the selling shareholders.

Currently, promoters and promoter group entities own 100% stake in the company.

Net proceeds from the IPO will be used for setting up a manufacturing facility for writing instruments at Valsad district in Gujarat; funding the firm’s capital expenditure and subsidiary Flair Writing Equipments Pvt Ltd (FWEPL).

The capital raised will also be utilised to support the working capital requirements of the company and subsidiaries FWEPL and Flair Cyrosil Industries. Also, the funds raised will be used for payment of the loan and general corporate purposes.

About 50% of the issue is reserved for qualified institutional buyers, 35% for retail investors and the remaining 15% for non-institutional investors.

Business overview

Flair Writing is among the top-3 players in the overall writing instruments industry with a revenue of ₹915.55 crore in fiscal 2023 and occupy a market share of approximately 9% in the overall writing and creative instruments industry in India, as of March 31, 2023.

The company is also among the Top-2 organised players, which have seen faster growth in revenue as compared to overall writing and creative instrument industry growth rate, i.e., while the industry grew at a compounded annual growth rate (CAGR) of 5.5% between financial year 2017 and 2023, they grew at a CAGR of approximately 14% during the same period.

Nuvama Wealth Management Ltd (formerly known as Edelweiss Securities Ltd) and Axis Capital Ltd are the book-running lead managers to the IPO, and Link Intime India Pvt is the registrar. The equity shares will be listed on the BSE and the NSE on December 5.

First Published:Nov 21, 2023 4:33 PM IST