RR Kabel IPO: A new entry to compete with the other listed players in the wires and cables industry

The wire and cables manufacturing company RR Kabel commenced its initial public offering (IPO) on September 13 within a price range of Rs 983 to Rs 1,035 and is scheduled to conclude on September 15.

This IPO comprises a total offer worth Rs 1,964 crore, out of which Rs 180 crore is fresh issue and the rest is Offer-for-sale. Out of these Rs 180 crore around 75% will be used to repay the company’s debt and the rest 25% will be used for general corporate purposes.

The company’s primary revenue source, the wires, and cables (W&C) segment, accounts for 89% of its operations, with a 5% market share among branded players.

The company also operates in the electronic goods space, contributing 11% to its revenue, offering products like fans, lighting, switches, and appliances. RR Kabel serves a diverse customer base and nearly 10% of the company’s revenue comes from exports.

As per the latest update, the RR Kabel IPO witnessed a subscription rate of 7.28 times. The public issue received a great response, with the retail category being subscribed 1.60 times, the QIB category achieving a subscription rate of 17.28 times, and the NII category reaching a subscription rate of 7.42 times.

Let’s compare RR Kabel’s financial performance with the other listed players in the same space.

When we analyse the data in terms of top-line revenue, Havells emerges as the top performer, generating the highest revenue among all the competitors. In the second position, we find Polycab. In terms of year-on-year revenue growth, RR Kable stands out as the top performer.

However, when we compare the net profits generated by these companies, Polycab leads with the highest profit of all the competitors. In terms of profit growth, once again, Polycab is the top performer, along with KEI Industries and Finolex Cables. RR Cables secures the second-to-last position among all.

Furthermore, when we examine the debt of the companies, we find that Finolex has a relatively low amount of debt compared to its company size, with only a double-digit figure. In contrast, others have triple-digit figures. Moreover, RR Kabel has the highest amount of debt on its balance sheet compared to other competitors in space.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.