Updated: September 9, 2023
RR Kabel Limited is gearing up for its IPO launch, with the subscription period scheduled to begin on September 13, 2023. As a prominent player in the consumer electronics industry, RR Kabel’s IPO has attracted significant attention from investors. This detailed article provides a detailed overview of RR Kabel IPO, including key dates, key company information, positive and negative factors, and a comprehensive review to help you make an informed investment decision. Masu.
RR Kabel IPO dates, lot sizes and details
| IPO start date | September 13, 2023 |
| IPO deadline | September 15, 23 |
| IPO listing date | September 26, 23 |
| Kind of problem | Book Built Issue IPO |
| face value | 5 rupees per share |
| IPO price range | 983 rupees to 1035 rupees per share |
| lot size | 14 stocks |
| Minimum order quantity | 14 stocks |
| Exhibition location | BSE and NSE |
| Total issue size | Rs. 196.401 billion |
| Latest issue | Rs. 180 million |
| OFS | Rs. 1784.01 billion |
| employee discount | 98 rupees per share |
RR Kabel Limited IPO Schedule
| IPO start date | September 13, 2023 |
| The IPO will close in | September 15, 23 |
| Basis for allocation | 21-9-23 |
| Initiate refund | September 22, 23 |
| Credit of shares to Demat. | September 25, 23 |
| Listing date | September 26, 23 |
| Deadline time for UPI obligation confirmation | September 15, 23 |
About RR Kabel Limited
Established in 1995, RR Kabel Limited specializes in manufacturing domestic appliances for residential, commercial, industrial and infrastructure applications. The company operates in two main segments:
Wires and cables: We have a wide range of household electrical wires, industrial electrical wires, power cables, special cables, and more to meet the diverse needs of electrical infrastructure.
FMEG (fans, lights, switches, and appliances): RR Kabel manufactures and sells fans, lighting solutions, switches, and home appliances under the “Luminous Fans and Lights” brand.
In 2020, RR Kabel made a major move by acquiring Arraystorm Lighting Private Limited, expanding its product portfolio to include LED lighting and related hardware for office, industrial and warehouse spaces. Additionally, in 2022, the company acquired the Home Electricity Business (HEB) of his Luminous Power Technologies Private Limited, further strengthening its FMEG portfolio.
RR Kabel operates wire and cable manufacturing units in Waghodia, Silvassa, Dadra and Nagar Haveli, Daman and Diu in Gujarat. It also has an integrated manufacturing facility in Roorkee, Uttarakhand. Bengaluru, Karnataka. Gagret in Himachal Pradesh manufactures FMEG products.
The company’s customers span domestic and international markets, and for the past three months ended June 30, 2023, 71% of its operating revenue was derived from the Wire & Cable segment and 97% from the FMEG segment through B2C channels. .
Financial status of RR Kabel Limited
The main financial situation of RR Kabel Limited is as follows.
| Fiscal year end/period end (amount in billions) | ||||
| detail | FY20 | FY21 | FY22 | 23rd year |
|---|---|---|---|---|
| assets | 1,545.36 | 1,715.11 | 2,050.64 | 2,633.62 |
| Earnings | 2,505.54 | 2,745.94 | 4,432.22 | 5,633.64 |
| Profit after tax | 122.40 | 135.40 | 213.94 | 189.87 |
| net worth | 875.07 | 1,033.38 | 1,237.05 | 1,390.47 |
| reserves and surplus | 459.23 | 594.93 | 781.31 | 914.15 |
| Total loan amount | 395.29 | 498.71 | 521.11 | 515.84 |
Purpose of RR Kabel Limited IPO
- IPO targets include both OFS and new issues. Under OFS, selling shareholders will sell their shares and the company will not benefit from it.
- In the new issuance, the Company intends to use the net proceeds from the issuance to fund the following purposes:
- Repayment or prepayment of all or part of borrowings borrowed by a company from banks and financial institutions.
- General corporate purposes.
RR Kabel Limited IPO valuation
RR Cable IPO Price IPO Band is set at Rs. 983 to Rs 1,035 per share.
- Considering last year’s FY23 EPS was 17.07 rupees, the P/E ratio is 61 times.
- Considering the weighted EPS of Rs 16.97 over the last three years, the P/E ratio is 61x.
- Listed peers like Havells India have a P/E of 79x (highest), Finolex Cables has a P/E of 33x (lowest) and the industry average P/E is 58x. Therefore, the IPO price range of 61x P/E is expensive.
RR Label IPO Gray Market Premium (GMP)
There is no authentic source that can verify the RR Kabel IPO GMP, but as of today, there are several sources on the Chittorgarh IPO website that indicate the GMP to be between 310 and 320.
Positive elements of investing in RR Kabel IPO
- Diverse product portfolio: RR Kabel Limited boasts a wide product portfolio that caters to residential, commercial, industrial and infrastructure needs. This diversity provides stability in different market conditions.
- Strategic acquisition: The company’s strategic acquisitions, such as Arraystorm Lighting Private Limited and Luminous Power Technologies Private Limited’s consumer electronics business, have expanded its product offering and market presence.
- Manufacturing capacity: RR Kabel has manufacturing units located at various locations in India and has a robust production infrastructure that ensures efficient operations and delivery of products.
- Customer diversity: RR Kabel serves a diverse range of domestic and international customers, reducing dependence on a single market or customer segment.
- Increased revenue: Consistent revenue growth in recent years reflects the company’s strong market position and demand for its products.
- Innovation and expansion: The company’s commitment to innovation and expansion plans highlight its forward-thinking approach to business, as evidenced by the introduction of Circlip.
Risk factors of investing in RR Kabel IPO
- Low profit margin in FY23: Although the company achieved good growth in sales in FY2023, it suffered from margin pressure in FY23.
- Fluctuations in raw material prices: Fluctuations in raw material prices, a common challenge in manufacturing, can impact a company’s profitability.
- Supply chain disruption: Disruptions or delays in the raw material supply chain can impact production and operations.
- Manufacturing facility risks: Failure or outage of our manufacturing facilities could adversely affect our business and financial stability.
- Market rating: The IPO price range has a high P/E ratio and may be seen as expensive compared to peers, which may discourage investors.
- Dependency on distributor: RR Kabel’s ability to maintain a stable distribution network and attract additional distributors, dealers and retailers is critical to business growth.
- Dependence on foreign markets: High dependence on a small number of distributors in foreign markets poses risks, particularly if there are material changes to business arrangements with these distributors.
- Related party transactions: Past and potential related party transactions may give rise to conflicts of interest and corporate governance concerns.
Should you invest in RR Kabel IPO?
RR Kabel Limited’s IPO provides a mixed investment opportunity.
- Although the company offers a diverse product portfolio, consistent revenue growth, and expansion plans, it also faces challenges such as raw material price fluctuations and supply chain risks.
- The company’s IPO valuation is relatively high compared to its peers, which may discourage investors.
- Investors with a high risk tolerance and long-term view may consider this IPO due to its growth potential.
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Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. He has been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
