RR Kabel Ltd, a leading manufacturer of wires and cables, backed by global private equity firm TPG, is set to open its initial public offering (IPO) for subscription on September 12, with the IPO closing on September 15. The company has revised its fresh issue size down to a maximum of Rs 180 crore ($24 million), according to the company's recent announcement.
The IPO comprises both a fresh issue of shares worth Rs 180 crore and an offer-for-sale (OFS) of 1.72 crore equity shares by promoters and investors. The total fund-raise from the IPO is expected to be around Rs 1,000 crore ($134 million), as per sources.
Promoters Mahendrakumar Rameshwarlal Kabra, Hemant Mahendrakumar Kabra, Sumeet Mahendrakumar Kabra, and Kabel Buildcon Solutions Pvt Ltd, part of the promoter group, will be selling shares in the OFS. Public shareholder Ram Ratna Wires Ltd will exit the company by selling its 1.23 percent stake in the OFS, while TPG Asia VII SF Pte Ltd will sell 1.29 crore equity shares. TPG currently holds a 16.67 percent stake in the Gujarat-based company.
The company has reserved Rs 10.8 crore worth of shares for its employees, who may be offered a discount. The anchor book will open for a day on September 12.
The proceeds from the fresh issue are expected to be used for repaying debt of Rs 136 crore ($18 million) and for general corporate purposes. As of August 28, RR Kabel's outstanding borrowings stood at Rs 777.3 crore ($104 million).
RR Kabel operates in two broad segments: wires and cables, which contributed 71 percent to the top-line in the quarter ended June FY24, and FMEG, including fans, lighting, switches, and appliances.
The company reported robust revenue of Rs 5,599 crore ($751 million) in FY23, a rise of 27.66 percent over the previous year. However, net profit fell 11.2 percent to Rs 189.9 crore ($25 million), impacted by higher input costs, finance costs, other expenses, and employee costs.
Upon completion of the IPO, RR Kabel's equity shares are expected to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on September 26. The company will credit shares in the demat accounts of eligible investors by September 25 and refunds will be credited to bank accounts of unsuccessful investors by September 22.
Axis Capital (NYSE:AXS) Ltd, Citigroup (NYSE:C) Global Markets India Pvt Ltd, HSBC Securities and Capital Markets (India) Pvt Ltd, and JM Financial Ltd are acting as the merchant bankers to the issue.
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