RR Kabel, a prominent player in India’s consumer electrical industry, is set to debut on Dalal Street on September 20. The company’s shares were trading at a premium of Rs 95-100 ($1 = Rs 83.05) in the grey market a day before the listing, indicating a potential listing gain of up to 10 percent over its issue price. This comes despite a drop in the unofficial market premium from around Rs 300-310 at the announcement of the issue to Rs 250 per share when the issue opened.
Established in 1995, RR Kabel specializes in wires and cables (W&C) and fast-moving electrical goods (FMEG) for residential, commercial, industrial, and infrastructure applications. The upcoming listing will mark RR Kabel as the first entity in the Indian stock markets to make a T+2 listing, signifying a listing two working days after the issue’s closure.
RR Kabel’s IPO was open for bidding from September 13 to 15 and aimed to raise a total of Rs 1,964 crore (Rs 1 crore = $120,409) via the IPO route. The company offered its shares in the fixed price band of Rs 983-1,035 each, with a minimum bid of 14 shares and multiples thereafter.
The IPO witnessed robust demand, with an overall subscription rate of 18.69 times. Qualified institutional bidders (QIBs) subscribed 52.26 times, non-institutional investors bid 13.23 times, and retail investors showed strong interest, with a subscription rate of 2.13 times.
Analysts tracking the grey market noted that recent market volatility and aggressive pricing could impact RR Kabel’s listing performance. Nevertheless, some analysts remain optimistic about the company’s long-term prospects.
Dhruv Mudaraddi, Research Analyst at StoxBox, commented, “We anticipate a decent listing for RR Kabel, with shares potentially opening at a premium of around 15 percent over the issue price of Rs. 1,035 per share. We advise investors who have received allotment to consider holding their shares from a medium to long-term perspective.”
RR Kabel, the fifth-largest player in the wires and cable market, holds significant potential to expand its market share, as per Mahesh M Ojha, AVP – Research at Hensex Securities. The company’s diverse product range, extensive domestic and global distribution network, strong financials, and established B2C business in the wires and cable industry position it favorably for future growth.
The IPO comprised a fresh issue of equity shares worth ₹180 crore and an offer for sale (OFS) of 1.72 crore equity shares worth ₹1,784 crore by the promoters and investors. In the OFS, TPG Asia VII SF Pte Ltd divested 1.29 crore equity shares, while public shareholder Ram Ratna Wires sold its entire shareholding of 1.364 million shares. Other selling shareholders included promoters Mahendrakumar Kabra, Hemant Kabra, Sumeet Kabra, and Kabel Buildcon Solutions, part of the promoter group.