TGP Capital-backed wire and cable manufacturer RR Kabel Ltd will start subscription today as the company will sell its shares in a fixed price band of Rs 983-1035 per piece with a lot size of 14 shares and multiples thereof. The three-day bidding ends Friday.
Founded in 1995, RR Kabel provides consumer electrical products used for residential, commercial, industrial and infrastructure purposes in two major segments, namely wires and cables, including domestic wires, industrial wires, power cables and specialty cables; and FMEG including fans, lighting, switches and appliances.
According to the RHP, the company’s listed peers include Havells India Ltd, Polycab India Ltd, KEI Industries Ltd, Finolex Cables Ltd, V-Guard Industries Ltd, Crompton Greaves Consumer Electricals Ltd, Bajaj Electricals Ltd.
RR Cable IPO Price Range: The price band of RR Kabel has been fixed between Rs 983 and Rs 1,035 per equity share of face value of Rs 5 each.
RR Cable IPO lot size: The lot size of RR Kabel is 14 shares and thereafter in multiples of 14 shares.
RR Kabel IPO anchor investors: The allocation to anchor investors for the IPO of RR Kabel is scheduled for today (Tuesday, September 12).
IPO details of RR Kabel: At the higher end of the price range, RR Cable IPO aims to raise Rs 1,964.01 crore from the IPO. The IPO includes a fresh issue of shares worth Rs 180 crore and an offer for sale (OFS) of 1.72 crore shares worth Rs 1,784 crore by the promoters and investors. In the OFS, TPG Asia VII SF Pte Ltd will sell 1.29 crore shares, while public shareholder Ram Ratna Wires will sell its entire shareholding of 13.64 lakh shares.
Other selling shareholders in the OFS include promoters Mahendrakumar Kabra, Hemant Kabra, Sumeet Kabra and Kabel Buildcon Solutions, part of the promoter group.
Objectives of the RR Kabel IPO: The company plans to use the proceeds from the fresh issue primarily for repaying debt worth Rs 136 crore and for general corporate purposes.
Date of allocation of the IPO of RR Kabel and date of listing of RR Kabel: RR Kabel’s IPO basis for allotment of shares will be finalized on Thursday, September 21 and the company will start redemptions on Friday, September 22, while the shares will be credited to the demat account of the allotted participants on Monday, September 25 . are likely to be listed on BSE and NSE on Tuesday, September 26.
Axis Capital Ltd, Citigroup Global Markets India Private Ltd, HSBC Securities and Capital Markets (India) Private Ltd and JM Financial Ltd are the book running lead managers (BRLM) for the offer. Link Intime India Private Ltd is the registrar of the offering.
RR Cable IPO Reservation: RR Kabel IPO has not more than 50% of the shares in the public issue reserved for Qualified Institutional Buyers (QIB), not less than 15% for Non-Institutional Investors (NII), and not less than 35% of the offering is reserved for Private investors.
RR Cable IPO GMP today: RR Kabel IPO GMP today or gray market premium is +218 comparable to the previous trading session. This indicates that RR Kabel’s IPO share price traded at a premium of Rs 218 in the gray market on Tuesday, according to topsharebrokers.com
Taking into account the upper end of the IPO price band and the current gray market premium, the estimated listing price of RR Kabel’s IPO share price is Rs 1,253 per piece, which is 21.06% higher than the IPO price of Rs 1,035.
The ‘gray market premium’ indicates that investors are willing to pay more than the issue price.
RR Kabel’s IPO: should you invest?
The structural growth drivers for consumer electronics may remain strong. RR Kabel has a diverse product range; it has scaled up operations in B2C in W&C and expanded the FMEG segment using its extensive global and domestic network, Reliance Securities said.
“We believe that the premiumization journey could potentially result in structural margin expansion and that B2C sales are likely to remain strong in the coming years; the recent correction in input prices and strong rise in multiple demand factors bode well for the company,” it added with a ‘subscribe’ rating on the issue.
With solid brand recognition, a diversified product profile, scale of operations, certified manufacturing facilities and a broad and largest distribution network, RKL is well positioned to leverage growth in the domestic consumer electronics market, said Choice Broking, which has a ‘subscribe with caution’ rating. review for the issue.
“Profit margins and return ratios are likely to improve going forward, especially in anticipation of lower commodity prices and improved business dynamics. At a higher price range, RKL demands a TTM P/E multiple of 47.4 times, which is lower than the peer average. However, the issue appears fully priced given the subdued profitability and return ratios,” it added.
