IPO listed on 20 Sep'23
R R Kabel Ltd
Minimum Investment
₹ 14,490 / 14 shares
Grey market premium
₹ 150 (15% premium)
Issue price
₹ 1035
Listing price
₹ 1,180
Listing gains
145 (14%)
Listing on
Sept 20, 2023
Our Verdict:
Avoid
- While the company has shown notable growth in revenue and net earnings, it's important to also consider other financial indicators such as diminishing profit margins, mediocre return ratios, and additional risk factors discussed below.
- Regarding valuations, considering an FY23 EPS of Rs 17, the PE multiple works out to 60x at the higher end of the price band. This suggests that the IPO is priced aggressively, offering limited potential for near-term gains.
- Even though the grey market premium (GMP) suggests a favourable listing, those looking for long-term capital growth should monitor the company's upcoming quarterly performance before making any investment commitments.
About the company
Founded in
6 Feb'95
Managing director
Shreegopal Rameshwarlal Kabra
- R R Kabel (RRK) stands as India's fastest-growing consumer electrical firm, witnessing an impressive CAGR of 43.4% from 2021 to 2023. By the end of March 2023, they had solidified their position as the fifth major entity in India's branded wires and cables sector, holding roughly 7% of the market share.
- In 2022, RRK established itself as a dominant force in wire and cable exports from India, accounting for ~9% of the country's export market value in this category.
- As for product quality and international standards, their offerings boast 35 global product certifications. This places them at the forefront, with one of the highest counts of such certifications among their Indian consumer electrical counterparts.
STRENGTHS
- Impressive Track Record: Between FY21-23, RRK exhibited a remarkable growth with a CAGR of 43% in Revenue, 19% in EBITDA, and 18% in Net Profit.
- Dividend History: The company seems investor-friendly having distributed dividends of 100% in FY22, 180% in FY23, and 90% in FY24 to date.
RISK FACTORS
- Deteriorating Profit Margins: The EBITDA margin declined from 9.22% in FY21 to 7.98% in FY22, dropping further to 6.35% in FY23. Similarly, the PAT margin fell from 4.93% in FY21 to 4.83% in FY22, and then to 3.37% in FY23.
- Significant Working Capital Requirements: The business requires substantial working capital, and may require additional financing to meet those requirements, which could negatively impact cash flows and the overall financial condition.
- Financial Indebtedness: As of March 31, 2023, the total debt amounted to Rs 515.8 crore and only Rs 136 crore of this will be settled using proceeds from the fresh issue.
- Cash Flow Concerns: RRK has experienced negative cash flows in the past. Persistent negative cash flow might affect its operations and growth.
Issue details
Issue type
Mainboard
Issue size
₹ 1,964.01 crore
Fresh Issue
₹ 180 crore
OFS
₹ 1,784.01 crore
Price range
₹ 983 - 1,035
Lot size
14 shares
Issue Objective
Net proceeds from the fresh issue will be utilised towards:
- Repayment or prepayment of borrowings availed by the company; and
- General corporate purposes.
Dates
Bidding open
13 Sep'23
Bidding close
15 Sep'23
Allotment date
18 Sep'23
Refund date
18 Sep'23
Listing
20 Sep'23
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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