Flair pens a successful debut, lists at 49% premium

• Flair’s stock listed at ₹452 as compared to its issue price of ₹304 per share.
• The grey market was expecting 30% listing gains from the stock.
• The company’s market cap stood at ₹5,301 crore according to Bombay Stock Exchange.

Flair Writing made a stellar debut on the D-Street at a premium of 65% on early Friday. However, the stock corrected during the day, ending the day with 49% listing gains. This is much ahead of grey market predictions which was hoping for 30% listing gains from the stock.

The stock closed at ₹452 as compared to its issue price of ₹304 per share. The company’s market cap stood at ₹5,301 crore according to Bombay Stock Exchange.

The ₹593 crore issue was subscribed 46.6x with outsized interest from institutional investors. The QIB portion of the issue was subscribed 115.6 times the shares on offer.

The optimistic mood seen in the markets with regards to public offers, can rub off, say experts.

“We believe the healthy listing is justified on the back of high growth seen in the writing instruments and stationery segment etc. and ongoing expansion plans to tap the future growth. We recommend allotted short term investors to book profits over and above 25% gains while long term investors can hold,” said Rajan Shinde, research analyst, Mehta Equities.

Here are the listing gains provided by the companies that debuted on D-Street this week.

Company	Listing gains	Grey market premium	Marketcap	Subscription details
Flair Writing	49%	30%	₹5,301 crore	46.6x
Tata Technologies	162%	75%	₹52,734 crore	69x
Gandhar Oil	78%	44%	₹2,573 crore	64x
Fedbank Financial Services	0%	NA	₹5,161 crore	2.2x
IREDA	87%	38%	₹16,123 crore	38.8%

The company which manufactures and sells Flair brand of pens, also acquired rights to international brands like Hauser and Pierre Cardin’s writing instruments. Its products currently reach 3.15 lakh wholesalers and retailers.

The IPO comprises fresh issue to the tune of ₹292 crore; and an offer for sale of ₹301 crore. The net proceeds from the fresh issue will be used to set-up a new manufacturing facility for writing instruments in Valsad, Gujarat. It will use the rest to fund capex; working capital requirements, loan payment and more.

The company’s revenues have been growing at a compounded annual growth rate (CAGR) of 22.85% from FY21 to FY23. Its net profit almost doubled in FY23 as compared to the year before.

Plant shutdowns, its inability to carry through its expansion plans, labour unrests, regulatory and other issues have been cited by the company as risk factors in its RHP.

It also adds that increased competition could have a material impact on its business. In FY23, the market share of organized players in the writing instrument space is around 78-80% with the rest being catered to by unorganized players, according to CRISIL.

SEE ALSO

$4

$4