Flair Writing Industries – About the Company

Flair Writing Industries Limited, with a market presence of over 45 years, is one of the leading manufacturers and distributors of writing instruments. The product range of the company includes all types of pens, stationery products and calculators.

As of 31 March 31, 2023, the product portfolio of the company includes 699 items sold in the market. This product range also includes steel bottles, casseroles, storage containers, cleaning solutions, serving solutions, paper pins and baskets.

The company operates with strong marketing and distribution channels comprising, distributors, wholesalers, super-stockists, direct dealers and retailers. Further using its strong distribution network company is expanding its product range like fountain pens and markers.

The company has around 11 manufacturing plants that are located at Naigaon near Mumbai, Maharashtra, Valsad, Gujarat, Daman, Uttarakhand and Union Territory of Dadra and Nagar Haveli and Daman and Diu.

Flair Writing Industries IPO Objectives

The objectives of Flair Writing Industries IPO are to utilize the fund to repay partially or fully the borrowings and set up a new manufacturing facility for writing instruments at Valsad district, in Gujarat. Some portion of the IPO will be also used for general corporate purposes.

Also Read: What is IPO: How it Works & Everything Else You Need To know

Part of the IPO fund will be also used to meet the capital expenditure of the company its subsidiary and its writing equipment. One of the other objectives of an IPO is funding of working capital requirements of the main company and its subsidiaries i.e. FWEPL and FCIPL.

Flair Writing Industries IPO Details:

Flair Writing Industries IPO Issue Price & Size

Flair Writing Industries IPO issue price and size is not known as it is officially not declared by the company. The size of the Flair Writing Industries IPO issue is Rs 745 crore comprises the fresh issue of equity shares aggregating up to Rs 365 crore and an offer-for-sale (OFS) of equity shares of Rs 380 crore by promoters and promoter group entities.

Flair Writing Industries IPO Launch Date

Flair Writing Industries IPO launch date is also not known as it has not yet been declared by the company. Once the IPO launch date is declared, it will be open for bidding for all categories of investors. All the details will be also updated here.

Flair Writing Industries Financial Statements:

Source: DRHP

Flair Writing Industries Financial Performance

The revenue of the company has grown at a CAGR of around 78% from FY21 to FY23 to reach at Rs 942.66 crore, the same was Rs 297.98 crore in FY21. While due to better EBITDA Margins, the operating income of the company grew at a surprising CAGR of 133% during the same period. In FY21 the EBITDA was Rs 35.88 crore and in FY23 stood at Rs 195.14 crore.

The Net Profit of the Company also exceptionally grew at a CAGR of 992% from Rs 98.9 lakh to Rs 118.1 crore. And that is thanks to improved Net Profit Margins that were merely 0.33% in FY21 now reached at 12.53%. During the same period, the company reduced its interest cost and maintained the depreciation that helped it to improve the net profit margins.

Flair Writing Industries IPO Promoters & Shareholding of the Company

Mr. Khubilal Jugraj Rathod and Mr. Vimal chand Jugraj Rathod are the main promoters of the company holding 20% and 15% stakes respectively in the Flair Writing Industries. There are eight more members in the promoters group, out of which the top five are holding 10% stakes each and rest three are holding 5% stakes each in the company.

Flair Writing Industries Shareholdings:

Source: DRHP

Why Invest in Flair Writing Industries IPO?

Investing in the Flair Writing Industries IPO you must have the rationales to put your money into such new companies. Flair Writing Industries IPO is no doubt one of the leading manufacturers and distributors of writing instruments with a strong presence in the market. The company has introduced various new products to increase its market share.

Though, every company has strength that helps it to expand its market share and revenue and weakness that can affect its business operations. So, below you can find the various points that need to be considered while investing in the IPO.

Strengths:

• The market of writing instruments is growing worldwide. The worldwide for writing instruments is estimated to be worth about $20 billion. At the same time, the Indian market for writing instruments is also growing and is expected to reach at ₹5,000 crore.
• Flair Writing Industries is one of the leading players in the pen segment with a 9% market share in the overall writing and creative instruments industry in India. This kind of market power gives the company an advantage in negotiating with distributors.
• Flair Writing Industries offers a wide range of products for various category of customers that includes, professionals, office users and at large students. The diversification of product users gives an advantage of well-distributed and balanced demand for products in various categories.
• As of March 2023, the company has 7,700 distributors/dealers and approximately 315,000 wholesalers/retailers that are helping to reach its products to end customers. This kind of strong distribution, dealers and network of wholesalers and retailers helps the company to maintain the uninterrupted supply of its products.
• Apart from the domestic market, Flair Writing Industries also exports its products to the US, UAE, Yemen, Japan etc. To deal with its overseas customers, the company has entered various OEM agreements with global companies for contract manufacturing. This kind of geographical market presence helps to earn revenue from well-diversified sources.
• The performance of the company was also very impressive with the CAGR growth of 77.86% in revenue in the last three years. The operating profit and net profit margins of the company also grew very well in the same period giving an encouraging return on the equity share.

Risks:

• The market of writing instruments is seasonal, especially in the student category, hence it is also vulnerable to fluctuations in demand.
• The company is facing stiff competition from well-known players like Cell World in the similar products category also making it difficult for the company to gain more market share.
• The leading brands of companies like 'Flair', 'Pierre Cardin', and 'Hauser', of which 'Flair' contributed 50.06% of the revenue from operations in FY2023. This kind of revenue reliance concentration in limited segments can affect the overall sales of the company if there is any disruption in these brands.
• The company is looking to diversify into new categories with the launch of innovative products but there are certain challenges like a reduction in operational efficiency, unexpected liabilities, and diversion of resources can affect the company's future growth prospects.
• The distribution network of the company is no doubt very strong and widespread but the company has not entered into any long-term agreements with its distributors that prevent the company from any kind of competitive actions from rivals. This kind of lack of business agreement can affect the revenue of the company in the long term.
• Writing materials and the various product trademarks of the company are not registered, and there are many unorganized and local manufacturers in the market. Hence, there is a risk of copyright and duplicate products sold by these entities, which will not only affect the revenue of the company but also disturb the brand image of the company in the same segment.

Flair Writing Industries IPO Grey Market Premium

The Grey Market Premium (GMP) of Flair Writing Industries IPO is not known as the issue price and date are not declared by the company. GMP is the pre-listing market price of the share with the premium amount added into the higher band of issue price.

Also Read: What is Grey Market Premium in IPO: How is GMP Calculated &Reliable

The GMP of the Flair Writing Industries IPO can fluctuate depending on the demand and supply of shares in the grey market. Though the GMP is not the right or completely reliable source of the listing price of any IPO, you need to check the valuation.

Flair Writing Industries IPO Review & Analysis

Though the price of Flair Writing Industries IPO is not known, it is difficult to find out the exact valuation of the company and compare it with its listed competitors. However, still, there are various factors that we can consider while analyzing this IPO.

Also Read: What to Check Before Buying IPO: Things to Know & Is it Safe

With the experience of more than four decades, Flair Writing Industries IPO is one the top sellers of writing instruments and stationery materials. The IPO price is not yet disclosed but if you see the financial growth of the company giving the exceptional returns promoters on capital employed and equity capital invested in the company. You can check the DRHP of the company to know more details about the future plan of the company and its business strategy.

Also Read: What is DRHP in IPO: How to Read & Difference between DRHP and RHP

Hence if the Flair Writing Industries IPO is fairly priced and issued at a discounted price, you can apply for the IPO. However, if the issue price is at a high premium and shares of Flair Writing Industries are issued at a very high valuation, then you can avoid applying in the IPO or can invest with a long-term investment time horizon.

Also Read: What are the Risk Factors Involved in Applying for an IPO

And once the Flair Writing Industries IPO is declared you can use the price-to-earnings per share ratio to compare the valuation of this company with other listed peer group members. Apart from that you can also use the price-to-book value method to compare the issue price of Flair Writing Industries IPO and decide whether to apply or not in the IPO.

How to Apply for Flair Writing Industries IPO?

If you have a trading and demat account you can apply for Flair Writing Industries IPO through your broker. However, if don't have these accounts you can apply to open a trading account and demat account at Moneysukh with all the required documents to verify your identity. Your accounts are verified and ready to use you can follow the steps given below to Flair Writing Industries IPO using Moneysukh’s best online trading platform.

Steps to Apply for Flair Writing Industries IPO:

Step 1: Wait for the date Flair Writing Industries IPO opens for online bidding.

Step 2: Now open trade.moneysukh.com and log in with your User ID & password.

Step 3: Navigate here to the IPO section and select the Flair Writing Industries IPO.

Step 4: Her have to fill in the various details like price, quantity, and so on.

Note: At the time of applying for IPO, make sure to bid at the cutoff price before submitting your application. 

Step 5: Now make the payment and submit your IPO application successfully.

How to Check Flair Writing Industries IPO Allotment Status?

Just like opening and applying for the Flair Writing Industries IPO checking the allotment status is also very easy and trouble-free. Shares in the IPO are allotted once the bidding process is completed, and the amount is refunded to whom shares are not allotted. Usually, when an IPO is oversubscribed many times, there is less chance of getting the allotments.

Also Read: How Shares are Allotted in Oversubscribed IPO: Allocation Process

If you are not getting an allotment of shares in the IPO in the retail category you can try in the HNI category to increase the chances of getting the allotment of shares in the IPO. If you have not been allotted any share you will get your application money back into your bank account or your amount will be unblocked if you have applied through ASBA.

Also Read: How to Apply for IPO in HNI Category: Benefits & Procedure

And if you get the allotment in the IPO you will have the shares transferred into your demat account before the day of listing. And you can sell the shares on the listing day you get the profit due to the very high premium listing price. And, to check the Flair Writing Industries IPO allotment status you can use the various online website like BSE, NSE and others.

Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh