RR Kabel IPO Details: Launch Date, Share Price, Issue Size, GMP & Review

RR Kabel – About the Company

RR Kabel, incorporated in 1995, is producing electrical wiring and other products for residential, commercial, industrial, and infrastructure purposes. It operates broadly into two segments The first one is wires & cables, which accounted for 71% of its total revenue in the quarter that ended June FY24, while earn remaining segment is called FMEG (fast-moving electrical goods) such as lights, fans, switches and electric appliances.

RR Kabel Limited is also known for being the first of its kind to introduce the LS0H (Low Smoke Zero Halogen) insulation technology in its wires and cable products. It has also introduced Unilay Core Technology in its products which provides heat resistance and flame retardant properties that make these wires and cables highly safe and long-lasting.

The company operates with two manufacturing units located at Waghodia, Gujarat, and Silvassa, Dadra and Nagar Haveli, and Daman and Diu where mainly wire and cables and switches are manufactured. For manufacturing the FMEG products it is using its operates three integrated manufacturing units located at Roorkee, Uttarakhand; Bengaluru, Karnataka; and Gagret, Himachal Pradesh with the clientele base from domestic market as well as international markets.

RR Kabel IPO Objectives

The total fund raised by RR Kabel through this IPO will be around Rs 1,964 crore. The fresh issue of shares is only worth Rs. 180 crore, while the offer for sale is Rs 1,784 crore offered by the promoters and private equity investors of the company.

The company has outstanding borrowings of Rs. 777.3 crore, hence apart from promoters divesting their stake, one of the main objectives of launching RR Kabel IPO is to pay off the debts of the company. The part of the issue will be used to pay the debt amounting to Rs. 136 crore. The amount remain will be used to fund the general corporate purposes.

RR Kabel IPO Issue Price & Size

RR Kabel IPO Issue Price will be in the range of Rs. 983 to Rs. 1035 per share, between which investors can bid while applying for the IPO. The RR Kabel IPO size amounts to Rs. 1,964 crore at the upper price band. Out of which,180 crores will be raised through fresh issue of equity shares, while Rs. 1,784 crore will be an offer for sale by the promoters and investors group.

RR Kabel IPO Launch Date

The launch date of RR Kabel IPO is September 13, 2023, and the IPO bidding will be open till September 15, 2023. Investors in all types of designated categories can bid or apply for the IPO through their brokers between these dates.

RR Kabel Financial Performance

The Revenue from operations of RR Kabel stood at Rs 4082.68 crore in the first nine months of FY23. This has registered a CAGR growth of around 33% from the revenue of Rs 2478.52 crore generated in the FY20.

However, the operating profit or EBITDA grew at a CAGR of 22.80% during the same period. The EBITDA margin of the company has come down from 9.35% to 5.94% due to the high cost of goods sold and a significant increase in other expenses too.

The Net Profit of the company was Rs 124.58 crore in the first nine months of FY23, while in FY20, the same was Rs 122.40 crore not showing significant growth during the same period. However, in FY22 company earned quite well and PAT was Rs 213.94 crore. The sluggish Net Profit growth was due to a decline in the Net Profit margins of the company. In FY20 the Net Profit margin was Rs 4.94%, which has come down to 3.05% in the initial nine months of FY23.

RR Kabel IPO Promoters & Shareholding of the Company

As per the RR Kabel IPO DRHP, there are more than 20 members in the promoters and promoters group and out of these Mahendrakumar Ramesh warlal Kabra, Tribhuvanprasad Rameshwarlal Kabra, Hemant Mahendrakumar Kabra, Mahhesh Tribhuvanprasad Kabra and Kirtidevi Shreegopal Kabra are the holding stake of more than 5% each in the company.

The total promoter and promoter group shareholding in the company stands at 66.42%. The remaining 33.58% is held by public shareholders, including TPG which holds 1.85 crore equity shares or a 16.67% stake in the Gujarat-based company.

Promoters Mahendrakumar Rameshwarlal Kabra, Hemant Mahendrakumar Kabra, and Sumeet Mahendrakumar Kabra, as well as Kabel Buildcon Solutions, from the promoter group, will be selling shares in the offer for sale (OFS).Ram Ratna Wires will exit from the holding of the company by selling its 1.23% stake of 13.64 lakh shares via the OFS. However, the American private equity firm TPG Asia VII SF Pte Ltd will sell 1.29 crore equity shares in the IPO.