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TPG-backed RR Kabel IPO gets approval from Sebi

29 Aug 2023, 04:44 pm

RR Kabel, the wires and cables manufacturer, has received approval from the market regulator Sebi to go ahead with IPO plans.

The initial public offering comprises a fresh issuance of shares worth Rs 225 crore by the company and an offer-for-sale (OFS) of 1.72 crore equity shares by promoters and investor TPG.

US-based private equity firm TPG Asia VII SF Pte Ltd will be selling 1.29 crore equity shares via OFS. As per draft papers, it holds 20 percent stake or 2.33 crore equity shares in the consumer electrical company.

The Sebi has issued observation letter on the draft papers filed by the company, on August 24. In Sebi's parlance, obtaining observation means the company can launch its IPO for subscription.

The TPG-backed company had filed draft red herring prospectus with the Sebi in May 2023.

The wires and cable products brand RR Kabel operator will utilise net fresh issue proceeds for repaying debts amounting to Rs 170 crore. And the remaining funds will be used for general corporate purposes.

RR Kabel claimed to be one of the leading companies in the Indian consumer electrical industry (wires and cables and fast moving electrical goods segment). The Indian consumer electrical industry was estimated at Rs 1.61 lakh crore in FY22 and is expected to grow at a compounded annual growth rate (CAGR) of 11 percent until FY27 to reach a market value of approximately Rs 2.66 lakh crore.

The company compares itself with listed peers like Havells India, Polycab India, KEI Industries, Finolex Cables, and V-Guard Industries.

In the nine-month period ended December FY23, RR Kabel has recorded net profit of Rs 124.6 crore, falling 20.1 percent compared to profit of Rs 156 crore in year-ago period. However, the revenue from operations remained strong at Rs 4,083 crore, rising 36.6 percent during the same period.

Axis Capital, HSBC Securities and Capital Markets (India), Citigroup Global Markets India, and JM Financial are the merchant bankers to the issue.

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