RR Kabel IPO: A Comprehensive Guide to the Offer

13 Sep 2023 , 07:46 AM

RR Kabel, a company backed by global private equity firm TPG, is planning to go public with an initial public offering (IPO). Here are the key details of RR Kabel’s IPO:

1. Price Band: The price band for RR Kabel’s IPO has been set at Rs 983 to Rs 1,035 per share.

2. Fundraising Amount: If the IPO is priced at the upper end of the range, RR Kabel aims to raise Rs 1,964 crore through the IPO.

3. Composition of IPO: The IPO consists of a fresh issue of equity shares worth Rs 180 crore and an offer for sale (OFS) of 1,72,36,808 equity shares worth Rs 1,784 crore at the upper price band. The OFS involves the sale of shares by the promoters and investors.

4. Allocation details: RR Kabel has reserved 50% of the net offer for Qualified Institutional Investors, 15% of the net offer has been reserved for non-institutional investors and the remaining 35% of the net offer has been allocated for retail investors.

5. Selling Shareholders: TPG Asia VII SF Pte Ltd will be the largest seller in the OFS, offloading 1.29 crore equity shares. Other selling shareholders include public shareholder Ram Ratna Wires, promoters Mahendrakumar Rameshwarlal Kabra, Hemant Mahendrakumar Kabra, Sumeet Mahendrakumar Kabra, and Kabel Buildcon Solutions.

6. Employee Reservation: The company has reserved Rs 10.8 crore worth of shares for its employees, who will receive shares at a discount of Rs 98 per share to the final offer price.

7. Subscription Dates: The IPO is scheduled to open for subscription on September 13, 2023, and close on September 15, 2023. The anchor book will be opened for a day on September 12.

8. Allotment and Refunds: RR Kabel plans to finalize the allotment on September 21, and refunds for non-allottees will be processed on September 22. The shares of successful allottees will be credited to their demat accounts on September 25.

9. Listing: RR Kabel intends to list its shares on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on September 26, 2023.

10. Minimum Bid: Investors can bid for a minimum of 14 equity shares and in multiples of 14 shares thereafter. Retail investors can invest a minimum of Rs 14,490 for 14 shares, while high net worth individuals can invest a minimum of Rs 2,02,860 for 196 shares.

11. Use of Proceeds: The company plans to use the proceeds from the fresh issue primarily to repay debt amounting to Rs 136 crore, with the remainder allocated for general corporate purposes. RR Kabel had outstanding borrowings of Rs 777.3 crore as of August 28.

12. Business Segments: RR Kabel operates in two main segments: wires & cables, which contributed 71% to its revenue in the quarter ended June FY24, and FMEG (fast-moving electrical goods), including fans, lights, switches, and appliances.

13. Merchant Bankers: Axis Capital, HSBC Securities and Capital Markets (India), Citigroup Global Markets India, and JM Financial are the merchant bankers managing the IPO.

The wire and cable manufacturing company reported a net profit of Rs 189.9 crore for the fiscal year ending in March FY23, marking an 11.2 percent decline compared to the previous year. This decline was primarily attributed to reduced operating margins due to increased input costs, alongside elevated finance expenses, other outlays, and employee-related costs, all of which had a negative impact on profitability.