RR Kabel, part of RR Global, an Indian manufacturer in the wires and cables and FMEG segments, was listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) on 20th September 2023.
The company’s shares were listed on NSE at Rs. 1,179 apiece and on BSE at Rs. 1,180 apiece, which is 14% higher than RR Kabel’s Initial Public Offering (IPO) issue price of Rs. 1,035.
About the Company – RR Kabel Ltd.
RR Kabel Ltd. is headquartered at Mumbai. The company deals in various types of wires and cables and FMEG products such as fans, switches, lights and switchgear. RR Kabel has manufacturing facilities at Waghodia, Silvassa, Roorkee, Gagret and Bangalore.
For FY23 the company’s revenue from operations was INR 5,599.20 Cr. with an EBIDTA of INR 357.70 Cr. and PAT of approx. 189.87 Cr. Wire and Cables segment contributed 88.56% to the company’s revenue, while FMEG segment contributed 11.44% as of FY23.
RR Kabel boasts of having 6,740 dealers / distributors and 1,06,626 retail outlets as of FY23. The company undertook an impressive marketing exercise between FY21 and FY23 when it managed to 3.5x its retail outlet count.
Some of the competitors of RR Kabel across its business segments (FMEG and different types of wires and cables) include: Polycab, Havells, Bajaj Electricals, Finolex Cables, KEI Industries, Crompton, V-Gurad, Cords Cable and Lapp Cable.
Mix of Fresh Shares and Existing Shares Offered in RR Kabel’s IPO
RR Kabel’s IPO, which opened on 13th September 2023 and closed on 15th September 2023, was a book-built issue of Rs. 1,964.01 crore. Out of this, Rs. 180 crore was from 0.17 crore fresh shares issued by the company, and the remainder was from the sale of 1.72 crore existing shares. These shares have a face value of Rs. 5.
Promoters whose shares in RR Kabel were offered in this IPO were Mr. Mahendrakumar Rameshwarlal Kabra, Mr. Hemant Mahendrakumar Kabra, and Mr.Sumeet Mahendrakumar Kabra. Apart from them, Kabel Buildcon Solutions Private Ltd., Ram Ratna Wires Ltd. also offloaded shares. Investor, TPG Asia VII SF Pte. Ltd. offloaded shares.
RR Kabel’s IPO had set a floor price of Rs. 983 and a cap price of Rs. 1,035 per share. Further, the lot size in the IPO had been specified as 14 shares, which translated to Rs. 14,490 as the minimum investment for willing investors.
As for the allotted shares for different classes of investors, 29.82% of the total offered shares were reserved for anchor investors, 19.88% of the shares were reserved for Qualified Institutional Buyers (QIBs), 14.91% of the shares were for High Net-worth Individuals (HNIs), and 34.79% of the shares were for retail investors. Apart from this, 0.61% of the shares were open to the company’s employees.
RR Kabel’s IPO subscribed 18.69 Times
RR Kabel’s IPO was subscribed 18.69 times. Qualified Institutional Buyers (QIBs) bid 52.26 times the allotted quota of shares. Bids placed by HNIs were 13.23 times the number of shares allocated for them while those placed by retail investors were 2.13 times the portion of shares reserved for them.
Proceeds to be Used During 2023-24 Fiscal to Address Company’s Borrowings
Capital raised from RR Kabel’s IPO will chiefly be used for ‘Repayment or prepayment, in full or in part, of borrowings availed by our Company from banks and financial institutions‘. The company has stated that up to Rs. 1,700 crore would be utilized to address the company’s borrowings in part or in full during FY-24.
RR Kabel has mentioned that these borrowings are chiefly from eight lenders, namely State Bank of India, HDFC Bank, Kotak Mahindra Bank, Citibank, Citicorp Finance India, Yes Bank, Federal Bank, and IndusInd Bank.
The remainder of the money raised from this IPO will go towards RR Kabel’s corporate expenses.