Owner of over 45 year old flagship brand “Flair”, Flair Writing Industries Limited (“The Company”) has filed its Draft Red Herring Prospectus (“DRHP”) with market regulator Securities and Exchange Board of India (“SEBI”).
The Company plans to raise fund of equity capital (face value ₹ 5) of a total offer size of ₹ 745 crore. The total offer size comprises of – (i) fresh issue of equity shares aggregating up to ₹ 365 crore and (ii) offer for sale of equity shares aggregating up to ₹ 380 crore.
According to CRISIL report, the company is the largest player in pens segment reporting a revenue of ₹ 754.18 crore in financial year 2023 from the pens writing instruments segment in India. It occupies a market share of approximately 9% in the overall writing and creative instruments industry in India, as of March 31, 2023.
The Company proposes to utilize the net proceeds of the Fresh Issue towards funding the following objectives-(i) setting up a new manufacturing facility for writing instruments in Valsad district in Gujarat at an estimated amount of ₹ 95.62 crore; (ii) Funding capital expenditure of the Company and its subsidiary, FWEPL(1) estimated amount of ₹ 86.75 crore; (iii) Funding working capital requirements of the Company and its subsidiaries, FWEPL(1) and FCIPL(2) estimated amount of ₹ 77 crore; (iv) Repayment/pre-payment, in part or full, of certain borrowings availed by the Company and its Subsidiaries, FWEPL and FCIPL estimated amount of ₹ 43 crore and balance amount towards general corporate purposes.
The Company is among the top three players in the overall writing instruments industry with a revenue of ₹915.55 crore in Financial Year 2023. The Company is also among the top two organized players which have seen faster growth in revenue as compared to overall writing and creative instrument industry growth rate. The industry grew at a CAGR of 5.5% between financial year 2017 and 2023, it grew at a CAGR of approximately 14% during the same period.
The offer for sale of equity shares comprises of equity shares aggregating up to ₹ 76 crore by Khubilal Jugraj Rathod; equity shares aggregating up to ₹ 57 crore by Vimalchand Jugraj Rathod; (The “Promoter Selling Shareholder”) and equity shares aggregating up to ₹ 38 crore by Nirmala Khubilal Rathod; equity shares aggregating up to ₹ 38 crore by Manjula Vimalchand Rathod; equity shares aggregating up to ₹ 38 crore by Rajesh Khubilal Rathod; equity shares aggregating up to ₹ 38 crore by Mohit Khubilal Rathod; equity shares aggregating up to ₹ 38 crore by Sumit Rathod; equity shares aggregating up to ₹ 19 crore by Sangita Rajesh Rathod; equity shares aggregating up to ₹ 19 crore by Shalini Mohit Rathod; equity shares aggregating up to ₹ 19 crore by Sonal Sumit Rathod (The “Promoter Group Selling Shareholder”)
The Company has reported the highest operating and net income margins of 17.8% and 9.6%, respectively, in Financial Year 2022 among other key writing instruments players, according to CRISIL.
Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited) and Axis Capital Limited are the Book Running Lead Managers to the IPO issue.