Flair Writing Industries IPO Grey Market Premium Soars Ahead of Listing

Flair Writing Industries IPO, set to debut on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) today, has witnessed a remarkable surge in its grey market premium. As of November 30, a day before its official listing, Flair shares were trading at an impressive 30 percent premium in the grey market, up from approximately 27 percent just a few days ago.

Also Read: Flair Writing IPO GMP: Flair Writing Industries Limited IPO GMP Trend

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The heightened optimism surrounding the IPO can be attributed to several factors, including the overall bullish sentiment in the equity markets, strong performance in the writing instruments and stationery segment as reported by the company, anticipated growth prospects in the sector, reasonable valuations, and robust subscription numbers during the IPO.

Flair Writing Industries is a Mumbai-based company renowned for its writing instruments. The company’s IPO will mark the fifth mainboard listing from the IPOs launched last week. While Tata Technologies, Gandhar Oil Refinery, and IREDA enjoyed successful debuts, Fedbank Financial Services had a more subdued listing.

Also Read: Link Intime IPO Allotment Status: How to check Link Intime IPO allotment status

Market observers are closely monitoring the grey market premium as an indicator of the possible listing price. The recent surge has pushed the grey market price of Flair shares to Rs 458, up from Rs 386-387 per share just a few days ago.

Rajan Shinde, a research analyst at Mehta Equities, believes that the strong listing performance is justified, citing factors such as the expected high growth in the writing instruments and stationery segment, diversification into housewares, steel bottles, and appliances, as well as ongoing expansion plans.

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Flair Writing Industries attracted substantial demand during its IPO, with qualified institutional buyers (QIB) showing remarkable enthusiasm by oversubscribing the offering by 115.6 times. The overall IPO was oversubscribed by 46.68 times, with high net worth individuals subscribing 33.37 times their allocated quota and retail investors 13.01 times.

Parth Shah, a research analyst at StoxBox, also expressed optimism about the IPO’s listing, highlighting the company’s rapid revenue growth and reasonable valuation.

The IPO consisted of a mix of a fresh issue amounting to Rs 292 crore and an offer-for-sale (OFS) of Rs 301 crore by the Rathod family. Flair Writing Industries plans to utilize the net proceeds for various purposes, including setting up a new manufacturing facility for writing instruments in Valsad, addressing capital expenditure and working capital requirements, repaying debts, and general corporate purposes.

With a diverse product portfolio comprising over 699 different items and a robust distribution network, Flair has exhibited a commendable financial performance, with profit growth at a CAGR of 993 percent and revenue growth at a CAGR of 78 percent during FY21-FY23. The EBITDA margin expanded significantly from 7.7 percent in FY21 to 21.2 percent in the quarter ending June FY24, and return on equity surged to 31.4 percent from 0.4 percent during the same period.

Investors who participated in the IPO can check their share allotment status on the BSE website or the portal of the IPO registrar, Link Intime India.

The company is set to complete the transfer of credit shares to the demat accounts of eligible investors by November 30, ensuring a smooth and timely listing on the stock exchanges.

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