Flair IPO: Rewriting the pen sector’s growth story?
₹745-crore initial public offer (IPO) by leading pen manufacturer Flair Writing Industries has put the spotlight on the sector’s prospects in today’s times. Various studies around the world have suggested better learning and stronger brain activity using traditional writing tools compared to smart digital writing devices. A 2014 study by US researchers Pam Mueller and Daniel Oppenheimer showed that longhand notes lead to better learning against typing out on a laptop.
Writing instruments have an estimated global market size of well over $15 billion, with India as one of the leaders. In the Indian stationery market, writing instruments grab the biggest pie, and within this, pens occupied the largest share (44%) in value terms in 2022-23, according to the draft red herring prospectus (DRHP) filed by Flair with the market regulator. The pens market is primarily flooded by mass market products priced between ₹5 and ₹15.
The higher-value category, priced above ₹100, had just 5-10% market share, the DRHP said. A high concentration of organized players is expected to pen a new growth story in the next five years, possibly outpacing their unorganized counterparts. This better showing would be reflective of the market share gains of the organized players during the pandemic, which forced the closure of many unorganized players due to weak demand for products and limited access to capital, according to a CRISIL report cited by the DRHP.
While this inspiring growth is a good augury, there may be some pockets of concern. A majority of players in this highly competitive industry operate in the mass market products—targeted at students—limiting their ability to increase prices. “Most of the organized brands have not been able to
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