RR Kabel’s ₹1,964 cr IPO to open on Sept 13; price band fixed at ₹983-1,035 per share

The three-day initial public offering (IPO) of consumer electrical product maker RR Kabel will open for public subscription on September 13. For anchor investors, the issue will open for a day on September 12. The shares of RR Kabel are expected to be listed on the stock exchanges on September 26.

The global private equity firm TPG-backed company has fixed its price band at ₹983-1,035 per equity share of face value of ₹5 each for its public offer, which would amount to ₹1,964 crore at the upper end of the issue price.

Investors can make a bid for a minimum of 14 equity shares and in multiples of 14 shares thereafter, which means the minimum investment amount required by retail investors would be ₹14,490.

As per the document filed with SEBI, the IPO comprises a fresh issue of equity shares worth ₹180 crore and an offer for sale (OFS) of 1.72 crore equity shares worth ₹1,784 crore by the promoters and existing shareholders.

The OFS will see TPG Asia VII SF Pte Ltd offloading 1.29 crore equity shares, while public shareholder Ram Ratna Wires will sell its entire shareholding of 13.64 lakh shares in the company. Among others, promoters Mahendrakumar Rameshwarlal Kabra, Hemant Mahendrakumar Kabra, and Sumeet Mahendrakumar Kabra, as well as Kabel Buildcon Solutions, a part of the promoter group, will also partially dilute their stake via OFS.

RR Kabel intends to use funds raised through the public issue of equity shares mainly for repaying debt up to ₹136 crore, and to meet general corporate purposes.

The company has reserved 50% of its issue for qualified institutional buyers (QIBs), up to 15% for high net-worth individuals (HNIs), and up to 35% for retail investors. It has reserved ₹10.8 crore worth shares for its employees, who will be offered at a discount of ₹98 per share to them in the final offer price.

Axis Capital, HSBC Securities and Capital Markets (India), Citigroup Global Markets India, and JM Financial are the merchant bankers to the issue. Link Intime India is the IPO registrar.

Formed in 1995, RR Kabel provides consumer electrical products used for residential, commercial, industrial, and infrastructure purposes. It operates in two broad segments - wires & cables and FMEG (fast moving electrical goods), including fans, lights, switches, and appliances.

For the quarter ended June 2023, RR Kabel posted a net profit of ₹74.34 crore as compared to ₹18.14 crore in the same period last year. The profit for the financial year 2022-23 stood at ₹189.87 crore. The revenue from operations was ₹1,597.3 crore at the end of the June quarter of FY24 as against ₹1,235.9 crore in the year ago period. For FY23, the company clocked a revenue of ₹5,599.2 crore. 

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