Flair Writing lists at 66% premium: Should you buy, hold, or book profit?

Flair Writing received higher-than-expected subscription demand, especially from QIB investors

The stock of Flair Writing Industries made a bumper debut, listing at a 66 percent premium over the IPO price, on December 1. Analysts now suggest holding the stock for the long term, citing the company’s ambitious plans for expansion and diversification, and the robust growth in the market.

The stock opened at Rs 501 on the NSE and at Rs 503 on the BSE, against an issue price of Rs 304, buoyed by an overall positive mood in the market and over-subscription of the public issue.

Flair Writing received higher-than-expected demand from QIBs, who were more aggressive in bidding by 115.6 times. Overall, the Rs 593-crore issue was subscribed 46.68 times during November 22-24. High net-worth individuals bought 33.37 times their allotted quota and the portion set aside for retail investors was booked 13.01 times.

The company is a top player in the writing instruments and stationery segment and now plans to diversify into housewares, steel bottles and appliances.

Let's check out what brokerages have to advise on the Flair Writing stock. Should you buy more, hold, or book profit?

Narendra Solanki, head of fundamental research at Anand Rathi Shares and Stock Brokers, believe the listing is justified due to its strong track record of growth and profitability, with a well-diversified product portfolio (housewares, steel bottles and appliances). Also, these products are widely accepted for their quality and brand reputation across domestic and international markets.

“With an ongoing focus on expansion plans, strategic partnerships with global brands and healthy further growth prospects. We suggest the investors hold the shares for a long time,” Solanki said.

The listing has beaten the estimates of Mehta Equities as the issue received higher-than-expected subscription demand. The healthy listing is justified because of high growth seen in the writing instruments and stationery segment, diversification into housewares, steel bottles and appliances and ongoing expansion plans to tap the future growth.

“We recommend short-term investors to book profits while long-term investors can hold considering healthy growth in the writing and creative instruments industry in India and strategic partnership with global brands,” said Rajan Shinde, research analyst at Mehta Equities Ltd.

“Along with the feat of being among the top three players in the overall writing instruments industry, Flair’s rapid revenue growth along with the geometric expansion in demand is a testament to its successful market penetration and responsiveness to increased demand, particularly in the school sector. The RoE surpassing 31.2 percent in the latest year indicates efficient capital utilisation and a robust asset turnover ratio of 1.5 implies above-average asset efficiency,” said Parth Shah, research analyst at StoxBox.

Shah remains constructive on the company and recommends investors to hold the stock with a medium to long-term perspective.