The Initial Public Offering (IPO) of RR Kabel, which opened for subscription on Wednesday, has been subscribed 12% on its first day. The IPO will remain open for subscription until Friday, September 15, 2023.
As of the first day, the retail investors' portion was subscribed 19%, the Non-Institutional Investors (NII) portion was subscribed 10%, and the employee portion was subscribed 34%. However, the Qualified Institutional Buyers (QIBs) portion did not see any subscriptions.
The company has reserved not more than 50% of the shares in the public issue for QIBs, not less than 15% for NIIs, and not less than 35% of the offer is reserved for Retail Investors. RR Kabel has also reserved ₹10.8 crore worth shares for its employees at a discount of ₹98 per share to the final offer price.
According to data from the BSE, RR Kabel IPO received bids for 16,18,148 shares against 1,33,17,737 shares on offer. The retail investors' portion received bids for 12,86,922 shares against 66,01,237 shares on offer. The NII's portion received bids for 2,91,816 shares against 28,29,102 on offer. The QIBs portion received bids for only 980 shares against 37,72,137 on offer while the employee portion received bids for 40,460 shares against 1,15,261 on offer.
At the upper end of the price band, RR Kabel aims to raise ₹1,964.01 crore (approx. $236.7 million) from the IPO. This includes a fresh issue of equity shares worth ₹180 crore and an Offer For Sale (OFS) of 1.72 crore equity shares worth ₹1,784 crore by the promoters and investors. The OFS includes 1.29 crore equity shares from TPG Asia VII SF Pte Ltd and 13.64 lakh shares from public shareholder Ram Ratna Wires. Other selling shareholders in the OFS include promoters Mahendrakumar Kabra, Hemant Kabra, Sumeet Kabra, and Kabel Buildcon Solutions.
The company plans to utilise the proceeds mainly for repaying debt amounting to ₹136 crore, and for general corporate purposes.
The grey market premium (GMP) for RR Kabel IPO was +150, indicating that the shares were trading at a premium of ₹150 in the grey market. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of RR Kabel IPO share price is ₹1,185 apiece, which is 14.49% higher than the IPO price of ₹1,035.
Analysts have given mixed reviews on the RR Kabel IPO. Brokerage firm Canara Bank Securities recommended subscribing for the long term due to strong revenue growth in wires and cables. On the other hand, Reliance Securities also gave a 'subscribe' tag to the issue based on potential margin expansion and strong demand drivers.
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