RR Kabel Ltd, India’s fifth largest branded wires and cables manufacturer, has filed its Draft Red Herring Prospectus (DRHP) with the Securities Exchange Board of India (SEBI) for an upcoming initial public offering (IPO) of equity shares.
The company plans to raise funds through a fresh issue aggregating up to Rs. 225 crore and an offer for sale up to 17,236,808 equity shares of face value Rs. 5 each.
RR Kabel proposes to utilise the net proceeds towards funding of Repayment or prepayment, in full or in part, of borrowings availed by the Company from banks and financial institutions estimated to be Rs. 170 crores.
TPG Asia VII SF Pte Ltd, a US-based private equity firm, which holds a 20.99% stake in RR Kabel, will be selling some of its stake in the company through the IPO.
R RKabel is a part of R R Global Group with revenues of Rs 4,386 cr in FY22. The company’s revenue for the nine month ending December 2022 stood at Rs. 4,083 crore. Net profit came in at Rs. 214 crore and Rs. 125 crore for FY22 and nine month ending December 2022, respectively.
The firm is a leading company in the Indian consumer electrical industry comprising wires and cables and fast moving electrical goods (FMEG), with an operating history of over 20 years in India. RR Kabel is also the fastest growing consumer electrical company among our peers in India, growing at a CAGR of 33% between FY20 and FY22. (Source: Technopak Report).
The firm has a market share of about 8% in market value in FY22. The same stood at 5% in FY15. RR Kabel derives the highest revenue contribution from the business-to-consumer sales channel in wires and cables with approximately 75% of revenue coming from the B2C sales channel in FY22.
RR Kabel is also the largest exporter of wires and cables from India, in terms of value, which is about 11% market share of the exports. The company also has one of the largest network of electricians, covering 147,810 electricians across India, as on FY22.
RR Kabel’s revenue contribution from FMEG segment, which stood at 10.92% for the nine months ended December 31, 2022, is the highest among peers.
Axis Capital Limited, HSBC Securities and Capital Markets (India) Private Limited, Citigroup Global Markets India Private Limited and JM Financial Limited are the Book Running Lead Managers to the Issue.
