RR Kabel sets IPO price band at Rs 983-1,035 per share
RR Kabel, a global private equity firm TPG-backed company, is planning to go public through an Initial Public Offering (IPO). Here are some key details about the IPO:
1. Price Band: The company has set the price band for its IPO at Rs 983 to Rs 1,035 per share.
2. Fundraising: RR Kabel aims to raise a total of Rs 1,964 crore at the upper price band through this IPO.
3. Composition of IPO: The IPO will consist of two components:
– A fresh issue of equity shares worth Rs 180 crore. This means the company will issue new shares to raise this capital.
– An Offer for Sale (OFS) of 1,72,36,808 equity shares worth Rs 1,784 crore at the upper price band. In an OFS, existing shareholders, such as promoters and investors, sell their shares to the public.
4. Selling Shareholders:
– TPG Asia VII SF Pte Ltd will be the largest seller among the selling shareholders. They plan to offload 1.29 crore equity shares via OFS.
– Public shareholder Ram Ratna Wires will be selling its entire shareholding of 13.64 lakh shares in the IPO.
This IPO will allow RR Kabel to raise capital for various purposes, such as business expansion, reducing debt, or funding new projects. It also provides an opportunity for existing shareholders to partially or completely exit their investments in the company by selling their shares to the public.
Investors interested in participating in this IPO can do so within the specified price range, and the final price at which shares will be offered to the public will depend on the demand generated during the IPO subscription period.
In addition to TPG Asia VII SF Pte Ltd and Ram Ratna Wires, there are other selling shareholders in the Offer for Sale (OFS) component of RR Kabel’s IPO. These selling shareholders include:
1. Promoters:
– Mahendrakumar Rameshwarlal Kabra
– Hemant Mahendrakumar Kabra
– Sumeet Mahendrakumar Kabra
2. Kabel Buildcon Solutions: This is a part of the promoter group.
These shareholders have chosen to sell a portion of their equity holdings in RR Kabel through the IPO.
Additionally, RR Kabel has reserved a portion of the shares for its employees. This is a common practice in IPOs and is known as an Employee Reservation Portion (ERP). Here are the details of the employee reservation:
– Reserved Shares: RR Kabel has set aside shares worth Rs 10.8 crore for its employees.
– Employee Discount: Employees participating in the ERP will receive these reserved shares at a discounted price of Rs 98 per share. This discounted price is lower than the final offer price at which shares will be available to the general public.
Employee reservations in an IPO are a way for the company to reward and involve its employees in its growth by giving them an opportunity to purchase shares at a preferential rate. This can also help in boosting employee morale and aligning their interests with those of the company and its shareholders.
RR Kabel’s Initial Public Offering (IPO) is set to open for subscription on September 13, with a closing date of September 15. Prior to the public offering, the anchor book will be opened for institutional investors on September 12. Investors looking to participate in the IPO should take note of the minimum bid quantity, which is set at 14 equity shares, with the option to bid for additional shares in multiples of 14.
Retail investors have the opportunity to invest a minimum of Rs 14,490 for 14 shares, while their maximum investment is capped at Rs 1,88,370 for 182 shares. High net worth individuals (HNIs) with an investment limit ranging from Rs 2 lakh to 10 lakh can bid for a minimum of Rs 2,02,860 for 196 shares, with a maximum investment of Rs 9,99,810 for 966 shares. These details provide a clear outline of the investment parameters for those interested in participating in RR Kabel’s IPO, allowing them to plan their investments accordingly and make informed decisions.
RR Kabel, the consumer electrical product manufacturer, plans to utilize the proceeds from the fresh issue component of its Initial Public Offering (IPO) primarily for debt repayment, which amounts to Rs 136 crore. The remaining funds will be allocated for general corporate purposes. As of August 28, the company had outstanding borrowings totaling Rs 777.3 crore. This debt reduction strategy will likely improve the company’s financial position and reduce interest expenses, allowing it to allocate more resources towards its growth and expansion initiatives.
RR Kabel operates in two main segments: wires & cables and FMEG (fast-moving electrical goods). In the quarter ended June FY24, the wires & cables segment contributed 71 percent to the company’s total revenue. The FMEG segment encompasses a range of products including fans, lights, switches, and appliances, which collectively contribute to the company’s diverse product portfolio.
The merchant bankers handling RR Kabel’s IPO are Axis Capital, HSBC Securities and Capital Markets (India), Citigroup Global Markets India, and JM Financial. These financial institutions play a crucial role in facilitating the IPO process, including pricing the shares, marketing the offering to potential investors, and ensuring compliance with regulatory requirements. Their involvement signifies a significant step in the company’s journey towards becoming a publicly traded entity and accessing the capital markets for its growth plans.
