🖊 Cello, Flair: Writing Their Way to Successful IPOs
Cello and Flair are using age old pens to write their success stories via their IPOs. Read on.
‘A pen is mightier than the sword.’
Flair Writing Industries proved it.
The 5-decade old legacy brand went public on Dalal Street on December 1, 2023.
And boy, were people crazy about it!
Its shares were listed at a 66% premium over the issue price.
Investors rushed to grab a bite of their childhood writing brand before listing, resulting in an oversubscription of 46.4x:
Flair not only manufactures and sells writing instruments under its own brand name but has also acquired international luxury pen brands like Hauser (Germany) and Pierre Cardin (France).
This helps the brand cater to every need. Need a budget pen? Go for Flair. Want to go premium? Pick up Hauser or Pierre Cardin.
They supply to more than three lakh wholesalers and retailers, with over 7,700 distributors. Yep, well spread across the country.
Flair is one of the top three players in the writing instruments industry, with ~9% of the market share in 2023.
Flair’s compounded annual growth rate has been 22.85% over the last three years, beating the average growth rate of the writing instruments industry of 5.5%.
Its Rs. 593 Crore IPO comprised of a fresh issue of Rs. 292 Crore. The proceeds from the issue will be used to set up a new manufacturing plant for writing instruments in Valsad, Gujarat.
Well, Flair is not the only writing instruments brand that went public recently.
Cello’s IPO
One of India’s most trusted brands, Cello, made its debut on Dalal Street on November 6, 2023 at a premium of 28%.
Started in 1967 as a PVC footwear and bangle manufacturing company, this brand now has a diversified product portfolio across writing instruments (pens, stationery), consumerware (casseroles, bottles, kitchenware), and moulded furniture.
Consumer ware and kitchenware contribute to over 60% of revenue, writing instruments and stationery contribute 20%, and moulded furniture contribute the rest.
Today, the company has over 13 own manufacturing facilities in India, with a distribution network of over 1,26,000 retailers and 3,300 distributors.
Here, take a look at the company’s performance over the last three years:
Looks impressive?
Well, investors thought so.
Here, look at its pre-listing subscription status:
Result?
An oversubscription of 38.9x, much higher than Mamaearth’s 7.6x which was listed during the same time.
Pen-and-Paper Back in Fashion?
Now, this is where it gets really interesting.
Another stationery and art product company, DOMS Industries, is also joining the tribe with its Rs. 1,200 crore IPO!
Its large distribution network spread over 1,15,000 retail checkpoints and 3,750 distributors has made it a prominent player in this industry. In 2023, the company enjoyed a market share of 29% in the pencil manufacturing segment with sales crossing Rs. 390 crores (contributing to 32% of its gross product sales).
You can check out DOMS’ DRHP here.
You might be thinking, why on this digital Earth are pens and pencils making a comeback!?
While the rise of digital may convince you otherwise, here’s what data says:
India’s writing and creative instruments industry is worth Rs. 9,680 Crore (in 2023) and is expected to grow at a 7.7 - 8.4% CAGR during 2023-28.
Fun fact: this CAGR was a staggering 38.3% during 2021-23 (yep, the Covid era)!
Well, as they say, distance makes the heart grow fonder.
In this fast-paced digital world, the nostalgia associated with a physical pen and paper hits different.
There’s a personal touch, a creative expression, that takes over as a pen hits a piece of paper.
And, as the world increasingly adopts digital devices, there’s a whole lot of researchers trying to bring back the good, old handwriting with supporting data.
Some studies have shown that using a pen and paper is more strongly associated with improved learning. The process of physically writing down information engages the brain more actively than typing, leading to deeper processing and better recall.
No wonder, successful people like Bill Gates always move around with a small notebook and a pen!
Schools across the globe are taking notes too, as they are moving from digital whiteboards to blackboards and chalks.
Sweden, California, France - all countries are including mandatory cursive writing in schools.
Result? More export revenue for our homegrown legacy brands!
Startups, Take Notes!
The success of these IPOs and their rapid growth over the years clearly state that loyalty is heavily rewarded in the stock market.
These are not just companies, they’re household names, they’re a part of our daily lives.
In a world where startups are going public in a few years time, these legacy companies have carefully penned their success through years of constant innovation.
With these big players going public, how will the landscape of our age old pens and pencils change?
Will we see more innovation, better quality, or perhaps, a new era of eco-friendly stationery?
We’ll keep our pens ready to jot down what happens next!
Until then, read on.
Join us on WhatsApp to never miss an update 👇🏻