Everything you need to know about Flair Writing Industries Limited IPO

Flair Writing Industries Limited is launching its IPO. The opens for subscription on 22nd November and will close on 24th November 2023.

What does Flair Writing Industries Limited do?

The writing and creative instruments segment includes pens, pencils, markers, crayons, and other tools for writing and art. Pens hold a substantial share (44%) in this industry in terms of value. The Indian pen industry offers products across various price points, categorized into mass-market pens (up to ₹15), mid-premium pens (₹16 to ₹100), and high-value/premium pens (above ₹100).

The mass-market pen sub-segment is fiercely competitive, primarily driven by student demand, with pricing playing a crucial role. In contrast, mid-premium/premium pens focus on brand creation and product differentiation for success. The domestic market remains a significant driver of growth for the pen segment, while exports also contribute to the industry’s attractiveness for major players.

Flair Writing Industries Limited is a major player in the pens and writing instruments segment in India, reporting a revenue of ₹7,541.8 million in FY 2023. It holds a significant position in the writing instrument industry, capturing about 9% of the market share and ranking among the top three players in the sector. Notably, the company has experienced faster revenue growth compared to the industry average, with a Compound Annual Growth Rate (CAGR) of around 14% between FY 2017 and FY 2023, while the industry grew at 5.5% CAGR during the same period.

Key highlights include:

  • The company’s flagship brand, “Flair” has been in the market for over 45 years.
  • They offer a wide range of products catering to various consumer segments, including pens, stationery, and calculators, and recently diversified into manufacturing houseware products and steel bottles.
  • In FY 2023, they sold 1,303.60 million units of pens, with a significant portion sold domestically and a considerable percentage exported globally.
  • They have a robust distribution network with a large number of distributors and retailers, holding a substantial market presence both in India and internationally.
  • The company manufactures and distributes several brands, partnering with international brands in the writing instrument industry.
  • They’ve expanded into manufacturing houseware products and steel bottles through subsidiaries, aiming for growth in these areas.

Furthermore, the company aims to utilize funds for expanding manufacturing capacities, especially in the houseware and steel bottle segments, foreseeing significant growth opportunities in these areas. Additionally, they have initiated the production of steel bottles and plan further expansion by commissioning additional manufacturing lines.

The company operates from 11 manufacturing plants across various locations in India and has an extensive sales and distribution network, utilizing traditional and modern retail channels as well as e-commerce platforms.

Its products are sold under four brands namely;

  • Flair
  • Hauser
  • Pierre Cardin
  • ZOOX

What is the issue size of Flair Writing Industries Limited IPO?

The entire public offer of the company is a fresh issue and an offer for sale (OFS) of Rs 593 crore of equity shares wherein a fresh issuance of shares is worth Rs 292 crore and an offer-for-sale (OFS) is of Rs 301 crore worth of shares from the existing shareholders.

Financial information and other valuation metrics (in crores)

Particulars As of March 31, 2023 As of March 31, 2022 As of March 31, 2021
Total Assets 684.18 557.49 480.66
Revenue from operations 942.66 577.39 297.98
Net increase/(decrease) in cash and cash equivalents 0.51 (0.33) (2.91)
Profit after taxes 118.10 55.15 0.98
EBITDA 183.51 97.56 22.99

Risk factors to consider:

The company generates a substantial part of its revenue from sales under the “Flair,” “Hauser,” and “Pierre Cardin” brands. Any damage to these brands or their reputation could negatively impact the company’s business, financial health, cash flow, and overall operational results.

The company heavily relies on its distribution network, both within India and internationally, to sell its products. Any disruption to this distribution network could significantly harm the company’s business, operations, prospects, and financial outcomes.

Any slowdown or halt in the company’s manufacturing operations, whether caused by labor disputes or the inability to access sufficient electricity, fuel, or water for these operations, could significantly harm the company’s business, operations, potential, and financial outcomes.

The company operates in a competitive business landscape where competition from both established companies and new entrants could significantly impact its business, operations, financial outcomes, and future prospects.

As of the current Draft Red Herring Prospectus, some of the company’s trademarks are not registered under the company’s name. If the company faces challenges in registering trademarks or safeguarding existing intellectual property, or if there’s inadvertent infringement on others’ trademarks, legal action might be initiated against the company. This situation could significantly and negatively impact the company’s reputation, business operations, prospects, and financial outcomes.

The company face’s foreign exchange risks and sales of writing and creative instruments abroad are influenced by international market conditions, posing a potential risk to its business, financial well-being, and operational outcomes. Additionally, there are concerns regarding reliance on specific export destinations, and the company may encounter challenges in expanding into new international markets.

The company has a history of delayed or inaccurate filings of statutory forms with the Registrar of Companies (RoC). Additionally, there have been delays in filing GST returns and making payments towards employee provident fund contributions in the past.

Schedule/Timeline of Flair Writing Industries Limited IPO

Issue Period November 22, 2023 to November 24, 2023
Price band ₹ 288 to 304
Minimum Bid quantity 49 & multiples thereof
Deadline for accepting UPI mandate 5.00 p.m. on the Bid/Offer closing date
Finalization of Allotment November 30, 2023
Initiation of Refunds December 1, 2023
Credit of Shares December 4, 2023
Date of Listing December 5, 2023
Mandate End Date December 9, 2023
Anchor Investors Lock-In End Date December 24, 2023

How to apply to the Flair Writing Industries Limited IPO?

You can apply for the Flair Writing Industries Limited IPO using any supported UPI app by following two steps:

  • Enter your bid on Kite
  • Accept the UPI mandate on your phone

On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.

How to check the allotment status for Flair Writing Industries Limited IPO?

You can check the allotment status for the Flair Writing Industries Limited IPO on the website of the Registrar and Transfer agent. Alternatively, you can also check the allotment status on the NSE website.