Flair Writing IPO lists 65% higher, investors quickly book profits
Shares of Flair Writing, a well-known writing instruments company, made a strong debut on the BSE and NSE, with a premium of 65.46% and 64.80% over the issue price of Rs. 304, respectively. Post-listing, investors wasted no time in cashing out their profits, causing the shares to hit the lower circuit. Flar Writing's shares in early trade dropped 10% from the listing price to hit Rs. 452.7 apiece on BSE.
Objectives of the IPO proceeds
The company intends to use the net proceeds from the IPO to establish a new manufacturing facility in Valsad (Gujarat), fund capital expenditure, working capital requirements, and other general corporate purposes. In FY22, Flair Writing reported the highest operating and net income margins among its peers at 17.8% and 9.6%, respectively. The firm holds a 9% market share in India's writing and creative instruments industry and saw its IPO oversubscribed by 46.6 times.
Utilization of IPO proceeds and company performance
Nuvama Wealth Management (formerly Edelweiss Securities Limited) and Axis Capital served as the book-running lead managers for the issue. The company's successful debut highlights the strong demand for quality writing instruments and stationery products in both domestic and international markets. With its expansion plans and commitment to product excellence, Flair Writing is well-positioned to capitalize on this growing market segment.
Factors behind Flair Writing's strong listing
Speaking to Economic Times (ET), Prashanth Tapse of Mehta Equities, credited the strong listing to growth in the writing instruments segment, diversification into housewares, and ongoing expansion strategies. Separately, Shivani Nayti, Head of Wealth, Swastika Investmart, told ET, "Flair Writing's products are widely recognized for their quality and brand reputation, earning it a loyal customer base spanning across India and international markets." "It also maintains a robust distribution network, ensuring its products' accessibility to consumers nationwide," she added.
