RR Kabel mops up Rs 585.62 crore from anchor investors ahead of IPO
The Gujarat-based wire and cables manufacturing company, RR Kabel, has successfully raised Rs 585.62 crore from anchor investors on September 12, just ahead of its planned public issue opening. This is a significant milestone for the company as it prepares to go public.
The participation of 54 investors in the anchor book, including prominent names like Abu Dhabi Investment Authority, Government Pension Fund Global, HSBC Global, Ashoka Whiteoak ICAV, Carmignac Portfolio, TIMF Holdings, 3P India Equity Fund, Elara India Opportunities Fund, and Morgan Stanley Asia (Singapore), reflects strong investor interest in RR Kabel’s upcoming initial public offering (IPO).
The anchor book’s subscription by such marquee investors showcases confidence in RR Kabel’s business and growth prospects. It signifies the company’s ability to attract institutional and strategic investors who see potential in the wire and cable manufacturing sector, which is critical in various industries, including construction, infrastructure, and telecommunications. This capital infusion will likely support RR Kabel’s expansion plans and overall business development initiatives.
Overall, this successful anchor investor round positions RR Kabel favorably as it moves towards its public issue opening, potentially indicating strong demand for its shares when the IPO becomes available to the wider investing public.
The participation of domestic investors in RR Kabel’s anchor book, which includes well-known names such as HDFC Mutual Fund, ICICI Prudential, Axis Mutual Fund, Aditya Birla Sun Life Trustee, Kotak Mutual Fund, Nippon Life India Trustee, Mirae Asset, Franklin Mutual Fund, Bandhan Mutual Fund, Tata Mutual Fund, SBI Life Insurance, HDFC Life Insurance Company, and Max Life Insurance, demonstrates the strong domestic investor interest in the company’s upcoming initial public offering (IPO).
RR Kabel, backed by the global private equity firm TPG, has successfully allocated 56,58,201 equity shares to anchor investors at a price of Rs 1,035 per share. This pricing reflects the confidence that institutional investors have in RR Kabel’s business and its growth potential.
The price band for the IPO, set between Rs 983 and Rs 1,035 per share, provides potential investors with a range within which they can bid for RR Kabel’s shares during the public offering. The fact that the anchor book has garnered substantial interest from both global and domestic investors suggests a positive outlook for the company’s listing on the stock exchanges.
Overall, RR Kabel’s successful anchor book subscription and the participation of a diverse set of investors bode well for the company’s IPO, highlighting strong investor confidence in the company’s prospects in the wire and cable manufacturing sector.
RR Kabel is set to commence its initial public offering (IPO) on September 13, with plans to raise Rs 1,964 crore through the public issue. The IPO comprises a combination of a fresh issue of equity shares valued at Rs 180 crore and an offer-for-sale (OFS) of 1,72,36,808 equity shares worth Rs 1,784 crore, at the upper price band. The shares in the OFS will be sold by the promoters and investors of RR Kabel.
Among the selling shareholders, TPG Asia VII SF Pte Ltd will be the largest, divesting 1.29 crore equity shares through the OFS. Other selling shareholders include public shareholder Ram Ratna Wires and RR Kabel’s promoters, namely Mahendrakumar Rameshwarlal Kabra, Hemant Mahendrakumar Kabra, and Sumeet Mahendrakumar Kabra. Additionally, Kabel Buildcon Solutions, a part of the promoter group, will also participate in the OFS.
The public issue is scheduled to close on September 15. RR Kabel’s IPO is expected to attract substantial investor interest given its strong anchor book subscription, the participation of both domestic and global investors, and the company’s presence in the wire and cable manufacturing sector, which is essential for various industries such as construction, infrastructure, and telecommunications. This IPO will provide investors with an opportunity to be part of RR Kabel’s growth journey in the coming years.
RR Kabel’s decision to utilize the net proceeds from the fresh issue mainly for debt repayment underscores its commitment to optimizing its financial structure and reducing its leverage. By retiring debt amounting to Rs 136 crore, the company aims to strengthen its balance sheet and improve its financial health. Reducing debt can have several benefits, including lower interest expenses, enhanced creditworthiness, and increased financial flexibility for future expansion and investment opportunities.
Furthermore, allocating the remaining funds to general corporate purposes indicates that RR Kabel intends to use the capital for day-to-day operational needs, potential business development, or other strategic initiatives that contribute to its long-term growth and stability.
The fact that RR Kabel had outstanding borrowings of Rs 777.3 crore as of August 28 highlights the significance of this debt repayment. Reducing this debt burden can lead to improved financial sustainability and allow the company to allocate its resources more efficiently towards its core business activities and future endeavors. It also makes the company more resilient in the face of economic challenges and market fluctuations.
Overall, this prudent use of the IPO proceeds demonstrates RR Kabel’s strategic financial planning and its commitment to achieving a stronger and more sustainable financial position as it moves forward.
