R R Kabel Limited IPO: All you need to know

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R R Kabel Limited IPO

The initial public offering (IPO) for R R Kabel Limited is set to open for subscription from 13 September 2023 to 15 September 2023. The set IPO price range is Rs. ₹983 to ₹1035 per share with a face value of ₹5 each. 

 The EMS IPO has a lot size of 14 shares with a minimum investment of ₹14,490. The listing date of the IPO is 26 September 2023 (expected). The total IPO size is ₹ 1,964 Crores, including a ₹180 Crore fresh issue and ₹1784 crore Offer-for-Sale (OFS)

R R Kabel Limited IPO: Business Overview

Incorporated in 1995, R R Kabel Limited provides consumer electrical products used for residential, commercial, industrial, and infrastructure purposes.

RR Kabel ranks as a foremost entity in India's wire, cable, and FMEG sectors, boasting the fifth-largest production volume and a 5% market footprint.

Nestled in Gujarat and Daman & Diu, RR Kabel's dual facilities cater to wire and cable production. Additionally, three FMEG-centric hubs operate across Uttarakhand, Karnataka, and Himachal Pradesh.

A sprawling network of 106,626 retailers bolsters its manufacturing reach, while 35 global certifications fortify its reputation. Delving into its offerings, RR Kabel crafts an array of electrical commodities, with wires and cables accounting for 71% of revenue and the residual 29% from FMEG items, primarily B2C.

R R Kabel Limited IPO: Details

IPO Open and Close DateSep 13, 2023 to Sep 15, 2023
IPO price range₹983 to ₹1035 per share
Lot Size14 Shares
IPO size₹1,964 Cr
Basis of AllotmentThursday, 21 September 2023
Credit of Shares to DematMonday, 25 September 2023
Listing DateTuesday, 26 September 2023

(Source: DRHP)

R R Kabel Limited IPO: Reservations

QIB Shares OfferedNot more than 50% of the Net Offer
NII (HNI) Shares OfferedNot less than 15% of the Net Offer
Retail Shares OfferedNot less than 35% of the Offer

(Source: DRHP)

Axis Capital Limited and Citigroup Global Markets India Private Limited have been appointed as the book-running lead managers for the R R Kabel Limited IPO, while Link Intime India Private Limited will serve as the registrar to the issue. The shares are expected to be listed on both BSE and NSE, with a tentative listing date of September 26, which falls on a Tuesday.

The objective of the issue:

The company plans to allocate the issue's net proceeds to fund the subsequent objectives:

  • Repayment or prepayment, in full or in part, of borrowings availed by the company from banks and financial institutions.
  • General corporate purposes.

R R Kabel Limited  IPO: Financial Performance

ParticularsFY23(in Rs Crores)FY22(in Rs Crores)FY21(in Rs Crores)
Total Revenue5633.644432.22745.93
Profit After Tax189.87213.93135.39
Current Assets1946.121524.861246.67
Current Liabilities114.35712.51577.98

(source: DRHP and RHP)

The Current Assets have increased from ₹ 1524.86 Crores in March 2022 to ₹ 1946.12 Crores in March 2023, with an increase of 27.6261% indicating overall Asset performance.

In terms of revenue, the Company has experienced significant growth in operating revenue resulting in an increase in Total revenue, rising from ₹ 4432.2 Crores in FY22 to ₹ 5633.64 Crores in FY23, with a conspicuous increase of 27.1071%. Moreover, Net profits have seen a decrease, going up from ₹ 213.93 Crores in FY22 to ₹ 189.87 Crores in FY23, which has dropped by 11.24% over the past year.

Key Performance IndicatorValues
EPS (Rs)17.09
P/E (x)39.26

(Source: DRHP)

R R Kabel Limited IPO: Strengths

  • The firm offers diverse products, fostering cross-sales. They tap into global trends, meeting demands for 5G cables, EV chargers, smart fans, and unique lighting.
  • The company leads its Indian peers in growth with a 43.4% CAGR from FY21 to FY23 and actively markets its brand and products across various customer touchpoints.
  • The company foresees capturing significant FMEG market growth with its omnichannel strategy, diverse product range, varied pricing, and knack for spotting segment gaps.
  • The company runs five manufacturing sites, is globally accredited, adept at crafting its diverse product line.
  • The company has a pan-India distribution network and also a global distribution network that helps it maximize its customer reach.

R R Kabel Limited IPO: Risks

  • The company faces risks from foreign currency shifts, impacting imports, exports, and borrowings, which could harm its financial performance.
  • The company uses bank channel financing to boost cash flow and guarantee some customer debts. Non-repayment by customers could hurt its profits.
  • The company's high power needs mean disruptions could raise production costs, impacting its operations and cash flows.
  • Counterfeit goods and trademark breaches could weaken the company's competitive stance.
  • The company might struggle to clinch favorable deals with global distributors. Losing major overseas partners could severely impact its business and financial health.

R R Kabel Limited IPO: Peer Comparison

Name of the CompanyRevenue (In Crore)PAT (In Crore)EPS ( in Rs)P/E RatioMcap (In Crore)
R R Kabel Limited5633.64189.8717.0939.26 
Havells India Limited4905.92358.0017.1179.4990,576.38
Polycab India Limited4375.19428.4184.8762.5777,214.77
KEI Industries Limited1959.5813852.9449.7223,372.92
Finolex Cables Limited1266.1417532.9734.5217,733.32
V-Guard Industries Limited1142.7752.724.3872.3713,636.63
Crompton Greaves Consumer Electricals Limited1807.73131.557.2941.8120,284.70
Bajaj Electricals Limited1522.1151.8518.862.513,472.11

(Source: BSE Results)

(As on 31st, March 2023)