RR Kabel IPO Day 2 Update: The initial public offering (IPO) of wires and cables manufacturer RR Kabel Ltd, which opened for public subscription on Wednesday, has been subscribed 0.59 times on the second day of subscription on Thursday, receiving bids for 78,90,848 shares against 1,33,17,737 shares on offer.
As of 1700 HRS on September 14, 2023, the non-institutional investor quota was subscribed 0.74 times, while the category for retail individual investors (RIIs) got 0.43 times subscription and qualified institutional buyers (QIBs) 0.77 times.
The IPO was subscribed 25 per cent on the first day of bidding on Wednesday. The RR Kabel IPO received bids for 32,78,072 shares against 1,33,17,737 shares on offer, according to NSE data.
The price range for the RR Kabel IPO is Rs 983-1,035 per share. At the upper end of the price band, the issue will fetch up to Rs 1,964 crore. On Tuesday, TPG-backed RR Kabel Ltd said it has mobilised Rs 585.62 crore from anchor investors.
The category for Retail Individual Investors (RIIs) was subscribed 36 per cent and the portion for non-institutional investors received 29 per cent subscription. The RR Kabel IPO will close on Friday, September 15.
RR Kabel IPO GMP
According to market observers, RR Kabel is currently trading Rs 93 higher in the grey market. The Rs 93 grey market premium or GMP is about 8.99 per cent higher than its upper issue price of Rs 1,035 per share. This means the grey market is expecting a 8.99 per cent listing gain from the public issue.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
About RR Kabel IPO
The IPO has a fresh issue of up to Rs 180 crore and an offer for sale of up to 1,72,36,808 equity shares.
The IPO allotment will take place on September 21. It will be listed on BSE and NSE on September 26.
The company runs five manufacturing units – one each cable and wire units in Waghodia in Gujarat and in Silvassa in the Union Territory of Dadra and Nagar Haveli, and a commercial lightings plant in Bengaluru and one each fast moving electrical goods (FMEG) units in Roorkee in Uttarakhand and Gagret in Himachal Pradesh. As much as 88 per cent of its revenue comes from cables and wires.
The company proposes to utilise Rs 136 crore of the net proceeds from the fresh issue to pare down debt.
RR Kabel, a part of the RR Global Group, had a net profit of Rs 214 crore on a revenue of Rs 4,386 crore in FY22.
Axis Capital, Citigroup Global Markets India, HSBC Securities and Capital Markets (India) and JM Financial are the managers to the offer.
Giving ‘Subscribe’ recommendation, brokerage LKP Securities in a note said, “RR Kabel is well-positioned to capture a significant share of growth due to their existing market share, their brand recognition, diversified product portfolio, ability to innovate, scale of operations, sizeable and certified manufacturing facilities and infrastructure, quality and safety of their products and the reach of their distribution network.”