RR Kabel IPO: Check Issue Size, Date and Price Band | Motilal Oswal

RR Kabel IPO: Check Issue Size, Date and Price Band


In the last few months, Indian IPO investors have made much money. A flurry of Initial Public Offerings (IPOs) is being launched into the markets, with most of them providing double-digit returns. Going with the flow, an IPO of a wire and cable manufacturing company – RR Kabel Limited – is opening for public subscription on 13 September 2023.

As per the record books, the company plans to raise Rs. 1,964 crores from its IPO. Keep reading to know the details of the RR Kabel IPO and subsequently decide whether you should invest in it.

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About RR Kabel:

RR Kabel Limited is one of the leading Indian consumer electrical goods companies. It was incorporated in 1995, with its headquarters in Mumbai, Maharashtra. The company’s products can be divided into two segments – wires and cables, comprising house wires, industrial wires, power cables, and special cables; and Fast-Moving Electrical Goods (FMEG), comprising fans, lights, switches, and small electronic appliances.

These products are sold in the domestic markets under two renowned brands – RR Kabel and Luminous. As of 30 June 2023, it had an exclusive pan-India network with 3,450 distributors, 3,656 dealers, and 1,14,651 authorized retailers. It is currently the fifth-largest player in the Indian branded wires and cables market, with approximately 8% market share. The company has two units at Waghodia and Silvassa and three integrated manufacturing facilities at Roorkee, Bengaluru, and Gagret.

Key strengths of RR Kabel:

  • Known for its innovation capability and diversified product portfolio
  • Boasts an extensive pan-India distribution network
  • In the business for more than 30 years
  • “Luminous” is a well-recognized household FMEG brand
  • Manufacturing facilities are equipped with the latest technologies
  • Among the fastest-growing consumer electrical companies in India

Key Risks or Weaknesses of RR Kabel:

  • Manufacturing facilities are prone to breakdowns or shutdowns
  • Business is highly dependent on its distribution network
  • Volatility in raw material prices can impact the profit margin
  • Any disruption in the supply chain can impact revenues

Financial Snapshot Of RR Kabel:  

Given below is the table depicting the financials of RR Kabel Ltd. for the last three fiscals. All details are as per the company’s Draft Red Herring Prospectus (DRHP) on the Securities and Exchange Board of India (SEBI) website dated 6th September 2023:

Particulars Period Ended June 30, 2023 As of and For FY Ended March 31
2023 2022 2021
Share Capital 48 48 24 24
Net Worth 1495 1390 1237 1033
Total Borrowings 404 516 521 499
Revenue From Operations 2724 5599 1236 1597
EBITDA Adjusted 130 358 354 253
Profit After Tax 74 190 214 135
Earnings Per Share (Diluted) 7 17 19 12
Net Asset Value (In Rs/share) 135 125 111 93
Return on Equity 5% 14% 19% 14%
 Return on Capital Employed 6% 16% 17% 14%

*Amount in Crores

As you can see, the company's net worth has remained stable between FY21 and FY23. The revenues have thrived from Rs. 1,236 crores in FY22 to Rs. 5,599 crores in FY23. However, the profits have been erratic, mainly due to the inclusion of the FMEG business. The total borrowings have remained steady between the last three fiscals before shooting up in the current financial year.

The ROE hovers around 15%, and if the company can take it to 20%, it can become an imposing investment proposition. An EPS of Rs. 17 to Rs. 19 is also a good signal for potential investors. 

Details of the IPO:

RR Kabel IPO will open for public subscription on Wednesday, 13 September 2023, and closes on Friday, 15 September. It will be a combination of a fresh issue worth Rs. 180 crores and an offer for sale worth Rs. 1,784.01 crores. 50% of the issue has been reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and the remaining 35% for retail investors.

As a retail investor, you can apply for at least 14 shares (one lot) and in multiples thereof within the price band of Rs. 983 to Rs. 1,035 per equity share. Refer to the table below for more details:

IPO Date 13 Sep to 15 Sep 2023
Listing Date 26-Sep-23
Face Value Rs. 5 per share
Price Band Rs. 983 to Rs. 1035 per share
Lot Size 14 shares
Total Issue Size 18,975,939 shares (aggregating up to Rs. 1,964 crores
Fresh Issue 1,739,131 shares (aggregating up to Rs. 180 crores)
Offer for sale 17,236,808 shares (aggregating up to Rs. 1,784 crores)
Employee Discount Rs. 98 per share
Listing At NSE, BSE

The final word

The company’s high growth in the last three financial years and impressive EPS make RR Kabel IPO an attractive option for potential investors. However, you should be wary of the risks attached. With Motilal Oswal, you can open a free Demat account and invest in IPOs seamlessly.


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