R R Kabel Limited’s IPO opened on 13th September 2023. R R Kabel is offering a fresh issue of equity shares aggregating up to Rs. 180 crores, and an offer for sale (OFS) of equity shares aggregating up to Rs. 1784.01 crores.
Note: The OFS portion is almost 10 times the fresh shares issue. ~75% of shares of the OFS portion are by the TPG Asia VII SF Pte. Ltd who is the PE investor in RR Kabel Ltd.
The combined total IPO Issue size is Rs. 1964.01 crores. You can bid in the IPO till 15th September 2023. Here is the complete IPO bidding process for new IPO investors.
Axis Capital, Citigroup, HSBC Securities, and JM Financial are the book-running lead managers of the IPO.
The article contains a detailed analysis of R R Kabel Limited’s IPO that will help you make informed investment decisions.
R R Kabel Limited IPO Details
| Particulars | IPO Details |
| IPO Opening date | 13th September 2023 |
| IPO Closing date | 15th September 2023 |
| IPO Price | Rs. 983 to Rs. 1035 per share |
| Lot size | 14 shares |
| Issue size | Rs. 1964.01 Cr |
| No. of fresh shares | 1,739,130 shares aggregating to Rs. 180 crores |
| Offer for Sale | 17,236,808 shares aggregating to Rs. 1784.01 cores |
| Listing on | BSE and NSE |
Other upcoming IPOs in 2023.
R R Kabel Limited IPO Timetable
| Particulars | IPO Details |
| IPO Opening date | 13th September 2023 |
| IPO Closing date | 15th September 2023 |
| Basis of Allotment date | 21st September 2023 |
| Credit of Share | 25th September 2023 |
| Listing date | 26th September 2023 |
R R Kabel Limited GMP
GMP data collected from various sources like reputed financial websites, news channels, stockbrokers and IPO blogs is under.
Remember – Grey Market Price (GMP) shows you an indicative price of R R Kabel Limited upon listing. You should take precautions because GMP is not an official price and only an indicative value.
| Date | GMP |
| 13th September 2023 | Rs. 150 |
| 12th September 2023 | Rs. 218 |
| 11th September 2023 | Rs. 205 |
| 8th September 2023 | Rs. 40 |
Industry Overview
The consumer electrical industry where RR Kabel operates consists of –
- heavy electrical products such as W&C (wires and cables)
- Light electrical products such as FMEG (fast-moving electrical goods)
A wire is a single conductor, whereas a cable is a group of conductors, used for, among other things, transmitting electricity and telecommunication signals.
FMEG includes electrical goods and appliances such as fans, lighting, electric heaters, and other household appliances.
The consumer electrical industry consisting of W&C and FMEGs was estimated at approximately Rs. 1,81,150 crore in Fiscal 2023 and is expected to grow at a CAGR of roughly 10% till Fiscal 2027 to reach a market value of approximately ₹ 2,66,500 crore.
The industry is highly competitive with the presence of many national and regional players.
Key Growth Drivers of the Consumer Electrical Industry in India
There are six key factors supported by a positive macro environment that is expected to provide growth in the W&C and FMEG industry between Fiscals 2022 and 2032.
- Public and private investment outlay in infrastructure
- Continued growth of the residential real estate sector
- Resilient commercial real estate sector
- Transition of automobiles and transport towards electric vehicles (“EVs”)
- Rural electrification
- Push towards renewable energy
In the Wires and Cables segment, the Total Addressable Market (“TAM”) for leading brands like RR Kabel, Polycab, and KEI is approximately Rs. 53,860 crores as of Fiscal 2023, which is projected to reach approximately Rs. 96,000 crores by Fiscal 2027.
In the FMEG segment, the TAM for leading brands such as Havells and Crompton Greaves and challenger brands such as RR Kabel and Polycab is approximately Rs. 83,100 crore as of Fiscal 2023, which is projected to reach approximately Rs. 1,24,000 crore by Fiscal 2027.
R R Kabel Limited Overview
RR Kabel is one of the leading companies in the Indian consumer electrical industry with an operating history of over 20 years. The company is a leading company in the Indian consumer electrical industry on account of the following
- Fastest growing consumer electrical company growing at a CAGR of 43.4% between Fiscal 2021 and Fiscal 2023
- Is the fifth largest player in the wires and cables market in India, with ~ 5% market share by value as of March 31, 2023.
RR Kabel sells products across two broad segments –
(i) wires and cables including house wires, industrial wires, power cables, and special cables;
(ii) FMEG including fans, lighting, switches and appliances
The company undertakes manufacturing, marketing and sale of wires and cable products under our ‘RR Kabel’ brand and a variety of consumer electrical products, like fans and lights under the ‘RR’ brand.
RR Kabel also manufactures, market and sell fans and lights under the ‘Luminous Fans and Lights’ brand.
The ‘RR Kabel brand has over 20 years of operating history, while the ‘RR’ and the ‘Luminous Fans and Lights brands have over 7 years and over 10 years of operating history.
The strengths of the company are under
RR Kabel has an extensive pan-India distribution presence with 3,450 distributors, 3,656 dealers and 114,851 retailers for selling electrical products in the domestic market.
RR Kabel also exports products to 63 countries in North America, APAC, Europe, and the Middle East. The exports constitute 26.94% of the revenue from operations.
For manufacturing W&C and switches, RR Kabel Ltd has two integrated manufacturing facilities located at Waghodia, Gujarat, and at Silvassa.
For manufacturing FMEG products the company operates three integrated manufacturing facilities which are located at Roorkee, Bengaluru, and at Gagret, Himachal Pradesh.
R R Kabel Limited Issue Size
RR Kabel is offering fresh shares in IPO for only Rs. 180 Crs. And the OFS portion of the IPO is an aggregate amount of Rs. 1784.01 crores.
RR Kabel will not get OFS money for company operations or expansion. The OFS portion is almost 10 times the fresh shares issue.
~75% of shares of the OFS portion are sold by the TPG Asia VII SF Pte. Ltd who was the PE investor in RR Kabel Ltd. The IPO seems to be a means to provide liquidity to the selling shareholders.
Total Issue Size of RR Kabel IPO is = Rs. 1964.01 crores. The IPO bidding process can be found here.
R R Kabel Limited Subscription Data
Below you can find the day-wise subscription data of the R R Kabel Limited IPO.
Subscription data shows the number of times the IPO is subscribed overall and also under each category.
| Date | QIB | NII | Retail | Employee | Total |
| Day – 1 13th September 2023 | 0.00 | 0.29 | 0.36 | 0.58 | 0.25 |
| Day – 2 14th September 2023 | 1.65 | 2.10 | 0.95 | 1.52 | 1.40 |
| Day – 3 15th September 2023 | 52.26 | 13.23 | 2.13 | 2.69 | 18.69 |
R R Kabel Limited Promoter Details
The promoters of R R Kabel Limited are
- Tribhuvanprasad Rameshwarlal Kabra
- Shreegopal Rameshwarlal Kabra
- Mahendra Kumar Rameshwarlal Kabra
- Kirtidevi Shreegopal Kabra
- Tribhuvanprasad Kabra HUF
- Kabra Shreegopal Rameshwarlal HUF
- Mahendra Kumar Kabra HUF
The promoters collectively hold 32,382,385 equity shares, which constitute 29.14% of the issued, subscribed and paid-up equity share capital of the company.
16 people (individuals & companies) form part of the promoter group. The promoter group collectively holds 41,393,762 equity shares, equal to 37.24% of the pre-issue shares issued.
In a nutshell, people forming part of the promoter and promoter group jointly hold 73,776,147 equity shares, equivalent to 66.37% of the equity share capital of the company.
As of now, TPG Asia VII SF Pte. Ltd holds 18,535,115 equity shares, representing 16.67% of the paid-up equity share capital of the company.
R R Kabel Limited Financials
Key financials of R R Kabel Limited Ltd. for the last 3 completed financial years FY23, FY22, and FY21 are under.
| Details | FY- 2023 | FY- 2022 | FY- 2021 |
| Total Assets | Rs. 2633.62 cr | Rs. 2050.64 cr | Rs. 1715.11 cr |
| Total Income | Rs. 5633.64 cr | Rs. 4432.21 cr | Rs. 2745.93 cr |
| Profit/ Loss After Tax | Rs. 189.87 cr | Rs. 213.93 cr | Rs. 135.39 cr |
| Net Worth | Rs. 1390.47 cr | Rs. 1237.04 cr | Rs. 1033.37 cr |
| Other Equity (including retained earnings) | Rs. 956.66 cr | Rs. 811.19 cr | Rs. 607.52 cr |
| Total Borrowing | Rs. 515.84 cr | Rs. 521.11 cr | Rs. 498.71 cr |
The net worth of R R Kabel Limited grew from Rs. 1033 cr in FY 2021 to Rs. 1390 cr in 2023. In the past three years, R R Kabel Limited’s long-term borrowings have remained more or less flat at around Rs. 500 cr.
The total income of R R Kabel Limited has grown in the last three years from Rs. 2745 cr to Rs. 5633 cr. But the PAT marginally grew from Rs. 135.39 cr to Rs. 189.87 cr during the last 3 years.
R R Kabel Limited Peer Comparison
The below table shows a comparison between R R Kabel Limited and other listed companies that are engaged in a similar business.
| Company | CMP | EPS | P/E | RoNW | NAV |
| R R Kabel Limited | – | 17.09 | – | 13.66% | 125.19 |
| Havells India Limited | Rs. 1360 | 17.11 | 79.49 | 16.18% | 105.75 |
| Polycab India Limited | Rs. 5293 | 84.87 | 62.57 | 19.23% | 445.25 |
| KEI Industries Limited | Rs. 2628 | 52.94 | 49.72 | 18.44% | 287.07 |
| Finolex Cables Limited | Rs. 1138 | 32.97 | 34.52 | 11.54% | 285.76 |
| V-Guard Industries Limited | Rs. 314 | 4.38 | 72.37 | 11.76% | 37.20 |
| Crompton Greaves Consumer Electricals Limited | Rs. 304 | 7.29 | 41.81 | 15.33% | 48.85 |
| Bajaj Electricals Limited | Rs. 1173 | 18.80 | 62.50 | 11.34% | 165.74 |
R R Kabel Limited Objects of the Issue
R R Kabel Limited proposes to utilize the Net Proceeds from the Issue for
1. Repayment of borrowings availed the company from banks and financial institutions
RR Kabel Ltd has entered into various financial arrangements with banks and financial institutions for funding needs. The credit facilities availed by the company include borrowings in the form of – term loans and working capital facilities.
The aggregate outstanding borrowings of the company is Rs. 777.29 cr as of 28th August, 2023.
R R Kabel Limited intends to utilize an estimated amount of Rs. 136 crores from the Net IPO Proceeds towards the funding of working capital requirements for FY 2024.
2. For General corporate purposes
The rest of the IPO amount will be spent on general corporate purposes subject to such utilization not exceeding 25% of the Net Proceeds, in compliance with the SEBI ICDR Regulations.
Should You Invest in R R Kabel Limited IPO?
RR Kabel operates in a highly competitive industry. They have scaled B2C business in the large and growing wires and cables industry.
The company has a diverse suite of well-known branded products in the W&C and FMEG categories.
Further, RR Kabel has an extensive domestic and global distribution network and technologically advanced precision manufacturing facilities.
Key risks to consider are –
- R R Kabel Ltd will not receive any proceeds from the Offer for Sale portion of Rs. 1784.01 cr
- Revenues depend on the performance of the wires and cables market
- The company is exposed to foreign currency fluctuation risks, with respect to the import of raw materials, export of products and borrowings
- It faces significant competitive pressures in the domestic market
- Outstanding criminal, tax and other legal proceedings of Rs. 53 cr.
The net worth of R R Kabel Limited grew from Rs. 1033 cr in FY 2021 to Rs. 1390 cr in 2023. In the past three years, R R Kabel Limited’s long-term borrowings have remained more or less flat at around Rs. 500 cr.
The total income of R R Kabel Limited has grown in the last three years from Rs. 2745 cr to Rs. 5633 cr. But the PAT marginally grew from Rs. 135.39 cr to Rs. 189.87 cr during the last 3 years.
After 3-4 days, post R R Kabel’s IPO is complete you can check here the allotment status.
