RR Kabel Limited IPO : GMP, review, other key details. Should you subscribe?

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About R R Kabel Limited Company

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

RR Kabel has two broad segments:

Wires and cables including house wires, industrial wires, power cables, and special cables; and
FMEG including fans, lighting, switches, and appliances.
The company undertakes the manufacturing, marketing, and sale of wires and cable products under ‘RR Kabel’ brand, and fans and lights under the ‘Luminous Fans and Lights’ brand.

In 2020, R R Kabel acquired Arraystorm Lighting Private Limited and obtained light emitting diode (LED) lights and related hardware business (LED Lights Business) along with its trademarks and design certificates, to expand their portfolio to cover office, industrial, and warehouse spaces. In 2022, the company acquired the home electrical business (HEB) of Luminous Power Technologies Private Limited, and obtained a limited and exclusive license to use the Luminous Fans and Lights brand for fan and light products for a maximum period of four years with a one-time option to further renew the license for a period of three months and, that includes a right to use 61 registered trademarks, and a portfolio of lights and premium fans, to strengthen our FMEG portfolio.

The company has two manufacturing units located at Waghodia, Gujarat, and Silvassa, Dadra and Nagar Haveli, and Daman and Diu which primarily carry out manufacturing operations of wire and cables and switches. Apart from that, it owns and operates three integrated manufacturing facilities which are located at Roorkee, Uttarakhand; Bengaluru, Karnataka; and Gagret, Himachal Pradesh, which carry out manufacturing operations in respect of FMEG products.

R R Kabel’s clientele comes from both the domestic market and international markets. In the last three months ending June 30, 2023, 71% of its revenue from operations came from the wires and cables segment; and 97% of the revenue from operations came from the FMEG segment, from the B2C channel.

RR Kabel IPO Details

R R Kabel IPO is a Book Built Issue. The IPO total issue size is Rs 1,964.01 Cr. The R R Kabel IPO price is ₹983 to ₹1035 per share. The IPO will list on BSE, NSE.

IPO Date	September 13, 2023 to September 15, 2023
Listing Date	[.]
Face Value	₹5 per share
Price	₹983 to ₹1035 per share
Lot Size	14 Shares
Total Issue Size	18,975,939 shares (aggregating up to ₹1,964.01 Cr)
Fresh Issue	1,739,131 shares (aggregating up to ₹180.00 Cr)
Offer for Sale	17,236,808 shares of ₹5 (aggregating up to ₹1,784.01 Cr)
Employee Discount	Rs 98 per share
Issue Type	Book Built Issue IPO
Listing At	BSE, NSE
Share holding pre issue	95,696,296
Share holding post issue	97,435,427

RR Kabel IPO Lot Size

The minimum lot size of this R R Kabel IPO is 14 shares required is ₹14,490.

Application	Lots	Shares	Amount
Retail (Min)	1	14	₹14,490
Retail (Max)	13	182	₹188,370
S-HNI (Min)	14	196	₹202,860
S-HNI (Max)	69	966	₹999,810
B-HNI (Min)	70	980	₹1,014,300

RR Kabel IPO Reservation

R R Kabel IPO a total of 18,975,938 shares are offered. QIB: 3,772,137 (19.88%), RII: 6,601,237 (34.79%), NII: 2,829,102 (14.91%).

Anchor Investor Shares Offered	5,658,201 (29.82%)
QIB Shares Offered	3,772,137 (19.88%)
NII (HNI) Shares Offered	2,829,102 (14.91%)
Retail Shares Offered	6,601,237 (34.79%)
Employee Shares Offered	115,261 (0.61%)
Total Shares Offered	18,975,938 (100%)

RR Kabel IPO Financial Information

Period Ended	31 Mar 2020	31 Mar 2021	31 Mar 2022	31 Mar 2023
Assets	1,545.36	1,715.11	2,050.64	2,633.62
Revenue	2,505.54	2,745.94	4,432.22	5,633.64
Profit After Tax	122.40	135.40	213.94	189.87
Net Worth	875.07	1,033.38	1,237.05	1,390.47
Reserves and Surplus	459.23	594.93	781.31	914.15
Total Borrowing	395.29	498.71	521.11	515.84

Objects of the Issue RR Kabel IPO

The company intends to utilize the net proceeds from the issue towards the funding of the following objects:

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

RR Kabel IPO Review

The company is one of the leading Indian consumer electrical goods manufacturers and enjoys brand value with quality products. It has posted steady growth in its top line but suffered pressure on margins for FY23. Based on annualized FY24 earnings, the issue appears fully priced. Investors may park funds for the medium to long-term rewards in this long race horse.

Brokerage firm, Canara Bank Securities Ltd, stated that RR Kabel is the fifth-largest player in the Indian wires and cables business. Following the acquisition of Luminous Home Electrical, the company plans to add premium and mid-premium fans and lights in 2022. With a 40% market share in the area, wires and cables account for the majority of the company’s revenue.

“In wires and cables, the company witnessed revenue growth of 63% in FY2022 with a volume growth of 23% and a growth of 21% with a volume growth of 20% in FY2023. However, the margin got impacted due to commodity prices. Based on the EPS of FY2023, the company seems fairly priced, we recommend to subscribe for long term,” said the brokerage house.

RR Kabel IPO GMP today

RR Kabel IPO GMP today or grey market premium is +150 similar to the previous trading session. This indicates RR Kabel IPO share price were trading at a premium of ₹150 in the grey market on Wednesday, according to topsharebrokers.com

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of RR Kabel IPO share price is ₹1,185 apiece, which is 14.49% higher than the IPO price of ₹1,035.

‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.

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Disclaimer: This price prediction is only for reference purpose only, this prediction is only if there are positive market sentiments, and any uncertainties in the company or global market condition is not covered in this analysis.

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