The initial public offering (IPO) of RR Kabel, a renowned wires & cables manufacturer in India, has garnered significant investor interest.
The IPO, which opened on September 13 and closes today, September 15, has already achieved full subscription.
In the RR Kabel IPO, the company allocated up to 50% of shares to Qualified Institutional Buyers (QIBs), 15% to Non-Institutional Investors (NIIs), and reserved 35% for Retail Investors.
Additionally, 1.15 lakh shares are set aside for employees, offered at a discount of ₹98 per share from the final offer price.
As of Friday, the final day of the IPO bidding process, RR Kabel IPO has been oversubscribed by 2.17 times.
The public issue has seen bids for 2.88 crore shares against the 1.33 crore equity shares available, according to data from the NSE as of 11:30 am.
Retail investors have subscribed 1.24 times, NIIs have shown strong interest with a subscription of 3.50 times, and the employee portion was subscribed 1.84 times.
QIBs have subscribed 2.80 times thus far.
Key Details of RR Kabel IPO
The RR Kabel IPO, valued at ₹1,964.01 crore, opened for public subscription on September 13. It 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 investors.
The IPO price band is set at ₹983 to ₹1,035 per share. TPG Asia VII SF Pte Ltd will offload 1.29 crore equity shares in the OFS, while public shareholder Ram Ratna Wires will sell its entire shareholding of 13.64 lakh shares.
Use of Proceeds
The company intends to utilize the fresh issue proceeds mainly to repay debt amounting to ₹136 crore and for general corporate purposes.
Listing and Grey Market Premium
RR Kabel IPO share allotment is expected to be finalized on September 21, with refunds initiated on September 22.
The shares will be credited to the demat accounts of eligible allottees on September 25. RR Kabel IPO share listing is projected for September 26 on both BSE and NSE.
As of today, the grey market premium (GMP) for RR Kabel IPO stands at ₹118 per share. This indicates that RR Kabel shares are trading at a premium of ₹118 in the grey market.
Considering the upper end of the IPO price band and the current GMP, the estimated listing price for RR Kabel IPO shares is ₹1,153 apiece, representing an 11.4% premium over the IPO price of ₹1,035.
RR Kabel’s Position in the Market
RR Kabel is the fifth-largest player in India’s wires and cables industry by value and the fastest-growing consumer electrical company in India, thanks to its integrated in-house manufacturing.
The company expanded its product portfolio in 2022 following the Luminous Home Electrical Acquisition.
The majority of RR Kabel’s revenue, around 74%, comes from the B2C segment, supported by a robust distribution network.
The company achieved a remarkable revenue growth of 63% in FY2022 in the wires and cables segment, with volume growth of 23%.
In FY2023, it sustained growth with a 21% increase and a volume growth of 20%, albeit with some margin impact due to commodity prices.
Canara Bank Securities recommends subscribing for the long term based on the EPS of FY2023, indicating a fair valuation.