RR Kabel sets IPO price band at Rs 983-1,035; TPG to sell 11.5pc via OFS

Leading wire and electrical cable manufacturer RR Kabel, which is backed by private equity major TPG, on Friday fixed the price band at Rs 983-1,035 for its Rs 1,964-crore initial public offering which is opening on September 13.

The IPO comprises a fresh issue of shares worth up to Rs 180 crore and an offer for sale (OFS) of over 1.72 crore shares by promoters and other external shareholders, led by TPG which will pare its shareholding to around 5 per cent through the share sale.

At the upper end of the price band, the issue will fetch up to Rs 1,964 crore, Rajesh Babu Jain, the chief financial officer of the Gujarat-based company, said.

Through the OFS, the promoters/promoter entities will sell 3-4 per cent of their holdings but will still continue to hold 64 per cent in the company. In fact in the pre-IPO process a fortnight ago, TPG had sold 5 per cent of its 21 per cent holding, which it had picked up in September 2018 for Rs 3,000 crore.

As of now the PE major owns 16 per cent of the company and will pare it down further to 4.5 per cent through the OFS, Jain told PTI here Friday.

The company runs five manufacturing units—one each cable and wire units in Wagodia in Gujarat and in the Union Territory of Silvasa, and a commercial lightings plant in Bengaluru and one each fast moving electrical goods (FMEG) units in Roorki in Uttarakhand and Gagret in Himachal, the managing director Shreegopal Kabra said, adding as much as 88 per cent of its revenue still come from cables and wires.

Ahead of the IPO, the company has reduced fresh issue size to Rs 180 crore from the earlier target of Rs 225 crore. The OFS will see offloading of more than 1.72 crore equity shares by promoters and other shareholders.

Those selling shares in the OFS include Mahendrakumar Rameshwarlal Kabra, Hemant Mahendrakumar Kabra, Sumeet Mahendrakumar Kabra, Kabel Buildcon Solutions and Ram Ratna Wires, which is a publicly traded group company, Jain said.

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.

The company has also reserved Rs 10.8 crore shares for eligible employees who will receive shares at a discount of Rs 98 per share on the final offer price.

Axis Capital, Citigroup India, HSBC Securities India and JM Financial are the book-running lead managers to the issue.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)