TPG-backed RR Kabel plans to raise Rs 225 crore through IPO

Those selling shares in the OFS are — Mahendrakumar Rameshwarlal Kabra, Hemant Mahendrakumar Kabra, Sumutilizeendrakumar Kabra, Kabel Buildcon Solutions Private Ltd, and Ram Ratna Wires Ltd.

TPG Capital-backed wires and cables manufacturer RR Kabel Ltd has filed preliminary papers with capital markets regulator Sebi to raise funds through an initial public offering (IPO).

The IPO comprises a fresh issue of equity shares aggregating up to Rs 225 crore and an offer for sale (OFS) of over 1.72 crore equity shares by promoters and other shareholders, according to the draft red herring prospectus (DRHP).

Those selling shares in the OFS are — Mahendrakumar Rameshwarlal Kabra, Hemant Mahendrakumar Kabra, Sumutilizeendrakumar Kabra, Kabel Buildcon Solutions Private Ltd, and Ram Ratna Wires Ltd.

Capital use

Apart from these, US-based private equity firm TPG Capital, which holds a 21 per cent stake in RR Kabel, will partly sell its stake in the company under the OFS.

The company proposes to utilise the net proceeds to the tune of Rs 170 crore from fresh issues to pare down, in full or in part, debt availed from banks and financial institutions.

RR Kabel, part of RR Global Group, posted a net profit of Rs 214 crore and revenues of Rs 4,386 crore in the financial year 2021-22 (FY22). For the nine months ended December 2022, the company reported a net profit of Rs 125 crore and revenues of Rs 4,083 crore.

The firm is a leading company in the Indian consumer electrical industry comprising wires and cables and fast-moving electrical goods. The company also has one of the largest networks of electricians, covering 1,47,810 electricians across India, as of FY22.

RR Kabel is also the fastest-growing consumer electrical company among its peers in India, growing at a CAGR of 33 percent between FY20 and FY22. The firm had a market share of about 8 per cent in market value in FY22. The same stood at 5 percent in FY15.

The company is also the largest exporter of wires and cables from India, in terms of value, having a 11-percent market share.

Axis Capital Ltd, HSBC Securities and Capital Markets (India) Private Ltd, Citigroup Global Markets India Private Ltd, and JM Financial Ltd are the book-running lead managers to the issue.