Flair Writing Products IPO Lists at 64.8% premium, ends at lower circuit

Strong listing for Flair Writing Products IPO, then hits lower circuit

Flair Writing Products IPO had a very robust listing on 01st December 2023, listing at a smart premium of 64.8% on the NSE. However, post the listing, the stock came under pressure and eventually closed the day at the 10% lower circuit limit for the day. The stock of Flair Writing Products Ltd closed the day at ₹450.90 per share, a discount of -10% on the listing price of ₹501 per share but still a premium of 48.32% over the IPO issue price of ₹304 per share. Certainly, the IPO allottees of Flair Writing Products Ltd would be disappointed with the listing performance of the stock on the first day of listing. The pattern was largely similar on the BSE also. On the Bombay Stock Exchange (BSE), the stock of Flair Writing Products Ltd opened at ₹503 per share, a premium of 65.46% over the IPO issue price of ₹304 per share. For the day, the stock closed on the BSE at ₹452.70, an overall loss of -10% on the IPO listing price of ₹503 per share but, still a premium of 48.91% over the issue price of ₹304 per share.  On the NSE and the BSE, the stock of Flair Writing Products IPO closed the listing day below the listing price of the day, but well above the issue price. The stock closed the day on both the exchanges at the -10% lower circuit, the maximum the stock is allowed to traverse.

Strong Nifty and Sensex had little impact on the stock

While the closing price of Flair Writing Products IPO on 01st December 2023 was substantially above the IPO issue price on both the stock exchanges, it did close well below the listing price on the BSE and also on the NSE; and this was a good 10% lower on both the stock exchanges. For the day, the Nifty closed 135 points higher while the Sensex closed a full 493 points higher; and that is what makes the lower circuit on the stock of Flair Writing Products Ltd all the more intriguing, since the cues from the markets overall were extremely positive and encouraging. Both the Nifty and the Sensex showed moderate gains in the range of 70 to 75 bps and the Nifty even got very close to its coveted 20,300 levels. That somehow could not rub off on the stock price performance of Flair Writing Products Ltd, which hit the lower circuit on the NSE and BSE early in the day and never managed to get out of the lower circuit under rather heavy selling pressure till the end of trading.

IPO subscription and pricing details

The stock had seen a very strong subscription in the IPO. The subscription was 49.28X  overall and QIB subscription was at 122.02X. In addition, the retail portion had got subscribed 13.73X in the IPO while the HNI / NII portion also got a healthy subscription of 35.23X. Hence the listing was expected to be fairly strong for the day. However, while the listing was strong, the performance strength could not be sustained despite positive back-up triggers like a robust Nifty and healthy subscription levels in the IPO.

The IPO price was fixed at the upper end of the band at ₹304 per share which was anyways along expected lines considering the relatively strong subscription in the IPO. The price band for the IPO was ₹288 to ₹304 per share. On 01st December 2023, the stock of Flair Writing Products Ltd listed on the NSE at a price of ₹501 per share, a strong premium of 64.8% over the IPO issue price of ₹304 per share. On the BSE also, the stock listed at ₹503, a premium of 65.46% over the IPO issue price of ₹304 per share. Here is the Flair Writing Products Ltd listing story on 01st December 2023.

How the stock of Flair Writing Products IPO closed on both exchanges>

On the NSE, Flair Writing Products IPO closed on 01st December 2023 at a price of ₹450.90 per share. That is a first day closing premium of 48.32% on the issue price of ₹304 per share but a steep discount of -10% on the listing price of ₹501 per share. In fact, the listing price turned out to be very close to the high price of the day on the NSE and the stock traded for the entire trading day well below the opening listing price. On the BSE also, the stock closed at ₹452.70 per share. That represents a first day closing premium of 48.91% above the IPO issue price of ₹304 per share but a rather steep discount of -10% on the listing price on the BSE at ₹503 per share.

On both the exchanges, the stock listed strongly above the IPO issue price but only managed to close the Day-1 at the 10% lower circuit, seldom going above the listing price. In fact, the stock spent most of the day, locked at the lower circuit. In fact, the opening price turned out to be very close to the high price of the day on the BSE as well as on the NSE. The high price of the day on both the stock exchanges on 01st December 2023 was well below the upper circuit price, but the stock hit the lower circuit price on both the stock exchanges. On the NSE and the BSE, the lower circuit price was also the low price of the day and the closing price of the stock.  On the NSE, the stock closed with open selling quantity of 3,96,354 shares, showing pent up selling on listing day. Similar sentiments were echoed on BSE too.

Price volume story of Flair Writing Products IPO on the NSE

The table below captures the opening price discovery in the pre-open period on the NSE.

Data Source: NSE

Let us look at how the stock traversed on the National Stock Exchange (NSE) on 01st December 2023. On Day-1 of listing, Flair Writing Products Ltd touched a high of ₹514.40 per share on the NSE and a low of ₹450.90 per share. The discount to the listing price sustained through most part of the day; with the stock spending better part of the listing day locked in the lower circuit. While the low price of the day was exactly the lower circuit price and the closing price of the day, the high price was well below the upper circuit price of the day. Mainboard IPOs do not have an upper circuit of 5%, unlike SME IPOs as they trade in the normal equity segment and not in the trade to trade segment. In this case, the stock of Flair Writing Products Ltd had an upper and lower circuit limit of 10% either ways on listing day.

For the day on the NSE, the upper circuit price was ₹551.10 per share while the lower circuit price was ₹450.90 per share. During the day, the high price of the stock was ₹514.40 which is well below the upper circuit price of the day. However, the low price of the day at ₹450.90 per share represented the lower circuit price of the day and also the closing price on listing day. On Day-1 of listing, the Flair Writing Products Ltd stock traded a total of 127.33 lakh shares on NSE amounting to value of ₹605.76 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers, as the stock stayed locked in lower circuit for most part of the day. The stock closed the day with pending sell orders of 3,96,354 shares on the NSE.

Price volume story of Flair Writing Products IPO on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 01st December 2023. On Day-1 of listing, Flair Writing Products Ltd touched a high of ₹514 per share on the BSE and a low of ₹452.70 per share. The discount to the listing price sustained through most part of the day; with the stock spending better part of the listing day locked in the lower circuit. While the low price of the day was exactly the lower circuit price and the closing price of the day, the high price was well below the upper circuit price of the day. Mainboard IPOs do not have an upper circuit of 5%, unlike SME IPOs as they trade in the normal equity segment and not in the trade to trade segment. In this case, the stock of Flair Writing Products Ltd had an upper and lower circuit limit of 10% either ways on listing day.

For the day on the BSE, the upper circuit price was ₹553.25 per share while the lower circuit price was ₹452.70 per share. During the day, the high price of the stock was ₹514 which is well below the upper circuit price of the day. However, the low price of the day at ₹452.70 per share represented the lower circuit price of the day and also the closing price on listing day. On Day-1 of listing, the Flair Writing Products Ltd stock traded a total of 6.98 lakh shares on BSE amounting to value of ₹33.02 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers, as the stock stayed locked in lower circuit for most part of the day. The stock closed the day with pending sell orders on the BSE too.

Market capitalization, free float, and delivery volumes

Volumes on the BSE were generally lower than on the NSE, but the trend was once again the same. The order book through the day showed a lot of weakness post-listing and that sustained till the close of trading session, with little hint of any bounce or late buying by close of the trading session. Even the sharp rally in the Nifty and the Sensex during the day, combined with robust subscription numbers for the IOP, did not help the stock to bounce back from the lower circuit, where it spent most of the trading day. On the NSE, out of the total 127.33 lakh shares traded during the first day of trading, the deliverable quantity represented 71.96 lakh shares or a deliverable percentage of 56.51% on the NSE. That is definitely at par with the median listing day delivery, showing limited speculative activity.

How was the speculative activity on the BSE on the first day of trading? Even on the BSE, out of the total 6.98 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 4.24 lakh shares representing total deliverable percentage of 60.73%, which is higher than the delivery share on the NSE, and also higher than the typical listing day median of delivery percentage on the BSE. That shows limited speculative activity on the BSE, which is not surprising as the stock spent most of the day locked in the lower circuit. Unlike the SME segment stocks, which are on T2T on the day of listing, the mainboard IPOs permit intraday trading even on the day of listing also.

At the close of Day-1 of listing, Flair Writing Products Ltd had a market capitalization of ₹4,771.25 crore with free-float market cap of ₹620.26 crore. Flair Writing Products Ltd has issued capital of 1,053.95 lakh shares with a par value of ₹5 per share.