Flair Writing Industries IPO - Investment Rationale, Issue Details, Financials, Peer Comparison: Motilal Oswal

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Flair Writing Industries Ltd.'s issue opened for subscription on November 22 and the issue will be closed on Nov 24. The company has set a price band in the range of Rs 288 to Rs 304 per equity share. The minimum order quantity is 49 shares and in multiple thereof.The Rs 5.9 billion IPO consists of fresh issue of 9.6 milllion shares and offer for sale of 9.9 million shares by promoters. The funds raised will be utilised for capital expenditure, debt repayment and funding of working capital requirement. The market cap post listing would stand at Rs 32 billion. .Financials: Flair has witnessed robust growth in its financial performance with revenue/profit after tax compound annual growth rate of 78%/9.9 times over FY21-23. Its Ebitda margin improved sharply from 7.7% in FY21 to 21.2% in Q1 FY24. It has capacity of 200 crore pens annually which post expansion will increase to 235 crore pens. Its return ratios are healthy with return on equity/return on capital employed of 20%/36% post dilution..Our view:Flair Writing is a frontrunner in the market with consistent healthy financial performance. Its vertical expansion into houseware products would further boost its revenues benefitting from its existing large distribution network. The stock is priced at 24.9 times Q1 FY24 price/earning (on diluted and annualised basis) which is discount to its peers. Hence, we recommend 'Subscribe'. Given the strong brand name, pan-India presence, robust financials and expansion plans, it makes Flair a compelling proposition..Risk and concerns ~82% of the revenue comes from the top three brands. Any harm to such brands or reputations may adversely affect business, financial conditions, cash flows and result of operations.The company’s business depends on the ability to respond and adapt to consumer needs and maintain an optimal product mix in terms of production volumes and profitability in the writing instruments industry.The writing instruments industry has many small, unorganised players, hence is a highly competitive..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Flair Writing Industries IPO - Investment Rationale, Issue Details, Financials, Peer Comparison: Motilal Oswal

The company has set a price band in the range of Rs 288 to Rs 304 per equity share.

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