India’s fifth-largest branded wires and cables manufacturer, RR Kabel, has submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) to raise funds.

What Happened? The draft papers reveal a fresh issue of up to ₹225 crore and an offer for sale of up to 17,236,808 equity shares with a face value of ₹5 each. RR Kabel plans to use the net proceeds to repay or prepay borrowings from banks and financial institutions, estimated at ₹170 crores.

U.S.-based private equity firm TPG Asia VII SF Pte Ltd, which owns a 20.99% stake in RR Kabel, will sell part of its stake through the IPO.

A member of the RR Global Group, the company reported revenues of ₹4,386 crore in FY22 and a net profit of ₹214 crore. For the nine months ending December 2022, revenue stood at ₹4,083 crore, and net profit was ₹125 crore.

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Wiring In The Money: With over 20 years of operating history in India, RR Kabel leads the consumer electrical industry, including wires, cables, and fast-moving electrical goods (FMEG). RR Kabel’s market share increased from 5% in FY15 to 8% in FY22 with the business-to-consumer (B2C) sales channel contributing about 75% of revenue in FY22.

The wire maker is also India’s largest exporter of wires and cables, holding an 11% market share in exports. Additionally, the company has one of the largest networks of electricians in India, covering 147,810 electricians as of FY22.

Axis Capital, HSBC Securities and Capital Markets (India), Citigroup Global Markets India, and JM Financial will serve as the book-running lead managers for the issue.

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