TPG-backed RR Kabel sets IPO price band at Rs 983-1,035. Check details

The share price band for the upcoming initial public offering (IPO) of the TPG-backed cable maker RR Kabel has been announced at Rs 983 - Rs 1,035. The size of the issue, which opens for subscription on September 13, will likely be at Rs 1,964 crore.

The three-day issue will close on September 15. The fresh issue size in the offer has been reduced to Rs 180 crore from Rs 225 crore earlier.

The IPO also includes an offer for sale (OFS) segment of up to 1.72 crore equity shares. The price band for the issue will be announced soon.

Under the OFS, 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.

Other OFS selling shareholders include promoters Mahendrakumar, Hemant Mahendrakumar, Sumeet Mahendrakumar, Kabel Buildcon.

The company has received approval from Sebi in the last week of August.

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 around Rs 170 crore.

The company is a leading player 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 peers in India, growing at a CAGR of 33% between FY20 and FY22, according to a report from Technopak.

It has a market share of about 8% in market value in FY22. The company 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’s revenue contribution from the FMEG segment, which stood at 10.92% for the nine months that ended December 31, 2022, is the highest among peers.

For the three months ended June 2023, the company has clocked revenues of Rs 1,613 crore and a profit of Rs 74.3 crore.

Axis Capital, HSBC Securities and Capital Markets (India), Citigroup Global Markets India and JM Financial are the book running lead managers to the issue.

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