This recently listed IPO has slipped 49% from high, dips below issue price

Shares of Flair Writing Industries hit a record low of Rs 264.65 as they were locked in the 10-per cent lower circuit on the BSE on Tuesday at 01:25 PM amid heavy volumes.

In the past two trading days, the stock of the stationary company with a flagship brand 'Flair' has slipped 18 per cent after a 42.9 per cent year-on-year (Y-o-Y) decline in its profit after tax (PAT) at Rs 19.0 crore in the December quarter (Q3FY24), due to muted demand. It had posted PAT of Rs 33.3 crore in the year-ago quarter (Q3FY23).

With the past two days' decline, the market price of Flair Writing Industries has tanked 49 per cent from its record high of Rs 514, touched on its debut i.e. December 1, 2023. Currently, the stock is trading 13 per cent below its issue price of Rs 304 per share.

A combined 835,056 equity shares, representing 0.79 per cent of total equity of Flair Writing, have, thus far, changed hands in trades today. There are pending sell orders for nearly 60,000 shares on the NSE and BSE, data shows.

In Q3FY24, the company's revenue declined 3 per cent Y-o-Y to Rs 224.90 crore from Rs 231.9 crore in Q3FY23. The reported earnings before interest, tax, depreciation, and amortisation (Ebitda) margin contracted 750bps to 15.4 per cent from 22.9 per cent.

However, the management remains upbeat on the prospects of its steel bottles segments and, to this effect, the company has decided to enter the domestic market through modern trade where the initial response looks very promising.  The company has also applied for a BIS license for its steel bottles and is awaiting results for the same.

"With our OEM partners experiencing macroeconomic headwinds in the western economy, muted domestic demand combined with the Red Sea crisis, it meant our OEM & export segment were affected due to lack of underlying demand. However, we are confident that this situation is transient in nature and remain hopeful of their demand revival inthe upcoming quarters," the management said.

Flair is among the top-3 players in the overall writing instruments industry - with a market share of approximately 9 per cent in the overall writing and creative instruments industry in India, as of March 31,2023, as per CRISIL Report.

Flair Writing is engaged in developing and manufacturing of writing instruments that are tailored to the continuously shifting market. They manufacture and distribute writing instruments including pens, stationery products, and calculators. They have also diversified into manufacturing houseware products and steel bottles.