Flair Writing share price Targets
Flair Writing Industries Ltd, a prominent player in the writing instruments industry, is set to launch its initial public offering (IPO) on November 22, 2023. As one of the top-3 players in the industry with a revenue of ₹915.55 crore in FY23 and a market share of 9%, Flair’s IPO has generated significant interest among investors. This blog delves into various aspects of the Flair Writing IPO, including the grey market premium (GMP) signals, subscription status, strengths and limitations, company overview, and an in-depth analysis of the expected share price targets in the coming years.
Table of Contents
Flair Writing Business Model
Flair Writing Industries Limited has crafted a resilient business model since its inception in 1976, centered around the dynamic landscape of writing instruments and beyond. With a robust product portfolio featuring well-known brands such as FLAIR, HAUSER, PIERRE CARDIN, FLAIR CREATIVE, FLAIR HOUSEWARE, and ZOOX, the company has demonstrated a commitment to innovation and adaptability in response to ever-evolving market demands. Its ISO 9001:2015 and ISO 14001:2015 certifications underscore a dedication to maintaining high-quality standards and environmental responsibility.
Flair Writing IPO Synopsis:
Flair Writing Industries Limited, a prominent player in the writing instrument industry, has launched an Initial Public Offering (IPO) to raise Rs 593.00 crores. The IPO, which commenced on November 22, 2023, and concluded on November 24, 2023, consists of a combination of a fresh issue of 0.96 crore shares, totaling Rs 292.00 crores, and an offer for sale of 0.99 crore shares, amounting to Rs 301.00 crores. The IPO price band is set at ₹288 to ₹304 per share, with a minimum lot size of 49 shares and a minimum retail investment requirement of ₹14,896.
The total issue size is 19,506,578 shares, with 20% allocated to Qualified Institutional Buyers (QIBs), 15% to Non-Institutional Investors (NIIs), and 35% to Retail Individual Investors (RIIs). Flair Writing IPO is also reserved for Anchor Investors, who were offered 30% of the total shares. The tentative listing date on BSE and NSE is set for Tuesday, December 5, 2023.
Key Strengths and Limitations of Flair Writing
Key Strengths of Flair Writing:
- Robust Revenue Growth:
- Flair has exhibited a commendable revenue growth rate of 15.86% over the past three years, indicating the company’s ability to capture market share and effectively capitalize on business opportunities.
- Financial Health:
- The company’s strong financial health is reflected in its impressive interest coverage ratio of 17.89, indicating a comfortable ability to meet interest obligations. Additionally, a current ratio of 2.66 suggests a healthy liquidity position.
- Promoter Holding:
- Flair’s 100% promoter holding underscores a high level of commitment and confidence from the company’s founders, aligning their interests closely with the overall success and well-being of the business.
- Market Dominance:
- As one of the top three players in the Indian writing instruments industry, Flair enjoys a substantial market presence. This is bolstered by a diverse product range and an extensive distribution network, which contributes to the company’s market dominance.
- Innovation and Quality:
- The company’s emphasis on high-quality manufacturing and innovation showcases a commitment to producing reliable and innovative writing instruments. This focus contributes to customer satisfaction and loyalty.
Key Limitations of Flair Writing:
- Consumer Preferences:
- Changing consumer preferences represent a potential risk, as shifts in trends or demands may require Flair to adapt swiftly to meet evolving market needs.
- Raw Material Costs:
- Flair is susceptible to the impact of fluctuations in raw material costs or potential shortages. Any significant increase in these costs could affect the company’s profit margins.
- Brand Dependency:
- The reliance on specific brands such as “Flair,” “Hauser,” and “Pierre Cardin” for a substantial portion of revenue may expose the company to challenges if these brands face a decline in popularity or fail to resonate with changing consumer preferences.
- Competition:
- In the competitive landscape of the writing instruments industry, Flair faces challenges from both organized and unorganized players. Intense competition could impact market share and pricing strategies.
- Working Capital Requirements:
- The necessity for significant working capital may pose challenges, especially if there are disruptions in the supply chain or delays in receivables, affecting the company’s overall liquidity and operational efficiency.
Analyst Recommendations:
Reliance Securities’ endorsement of Flair Writing Industries’ IPO stems from a meticulous evaluation of the company’s financial health and performance. They emphasize Flair’s remarkable consistency in financial metrics, showcasing a robust track record that spans several fiscal years. This includes a noteworthy growth rate of 14% CAGR from FY17 to FY23, significantly outpacing the industry average of 5.5%. Such stellar growth attests to Flair’s adept management and strategic positioning within the writing instruments sector.
Reliance Securities also points to Flair’s industry-leading profitability, indicating not only a strong market presence but also operational efficiency. The recommendation to subscribe to the IPO is underpinned by the company’s experienced promoters and innovative capabilities, signaling confidence in Flair Writing’s potential to deliver substantial returns to investors.
GMP and Projected Listing Price for Flair Writing IPO
As of today, the grey market premium (GMP) for Flair Writing IPO stands impressively at ₹85 per share, indicating a substantial 27.96% premium over the issue price of ₹304. This significant premium signals a highly positive investor sentiment even prior to the IPO’s introduction to the market. With the current GMP at ₹85, the estimated listing price is projected to reach ₹389 per share. It’s crucial to highlight that GMP serves as a crucial metric, providing insights into the market’s perception and strong demand for Flair Writing’s IPO.
The outstanding response to the IPO is clearly evident in the subscription status, with Flair IPO experiencing a remarkable oversubscription rate of an astounding 46.68 times. This overwhelming demand has further fueled the grey market sentiments, leading to the substantial increase in the GMP to ₹85, showcasing the market’s bullish stance on Flair Writing Industries. This surge in the grey market premium aligns with the heightened interest and positive outlook among investors, reinforcing the anticipation and optimism surrounding Flair Writing’s imminent market debut.
Flair Writing Share Price Targets
Investors eagerly anticipating the Flair Writing IPO are poised for a journey through potential gains, with a projected 26% overall return. At the heart of this journey lies the unveiling of year-wise share price targets, meticulously outlined to offer a comprehensive understanding of Flair Writing’s focused market trajectory.
Flair Writing Share Price Targets 2024: Initiating the ascent, the focus zeroes in on ₹400, with an optimistic stretch to ₹415, marking a promising kickstart and setting the tone for sustained growth.
Flair Writing Share Price Targets 2025: As the horizon broadens, the focus intensifies on ₹448, symbolizing a sustained upward movement. The secondary target of ₹489 adds another layer to the narrative, emphasizing a buoyant outlook that captures investor attention.
Flair Writing Share Price Targets 2026: The trajectory continues its climb, placing the focus squarely on ₹497. The secondary target of ₹607 unfolds a tale of persistent advancement, solidifying Flair Writing’s market presence and dominance.
Flair Writing Share Price Targets 2027: Breaking barriers becomes the primary focus, with the aim set at ₹537, signifying a substantial valuation milestone. The secondary target of ₹716 emphasizes a robust performance outlook that resonates with investors seeking growth opportunities.
Flair Writing Share Price Targets 2028: Surpassing the ₹600 mark emerges as a pivotal point, with a targeted ₹601 and an ambitious stretch beyond ₹800 at ₹816. The intensified focus on these figures underscores an upward trajectory, captivating investors with the allure of substantial returns.
Flair Writing Share Price Targets 2029: Sustaining momentum takes center stage, with the primary target at ₹673. The secondary target of ₹939 introduces an exciting dimension, magnifying the allure and potential for considerable appreciation.
Flair Writing Share Price Targets 2030: Reaching new heights becomes the overarching focus, with the target set at ₹754, signifying the culmination of strategic initiatives and sustained market dominance. The secondary target of ₹1127 underscores the long-term potential for substantial returns, further amplifying the focused narrative of Flair Writing’s promising future.
Conclusion:
Flair Writing Industries’ IPO has generated significant enthusiasm in the market, evident from the strong subscription and positive grey market premiums. While the strengths and growth prospects make it an attractive investment, potential risks should be carefully considered. The future price targets provide investors with a roadmap, and as always, it is crucial to conduct thorough research and seek professional advice before making investment decisions. Flair’s journey post-IPO is one that investors will keenly watch as it navigates the dynamic landscape of the writing instruments industry.
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Note: This blog is for informational purposes only. The provided projections and insights do not constitute financial advice, and readers are encouraged to conduct their own research before making investment decisions.
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