RR Kabel IPO to make 'T+2' listing on Wednesday; Here's what grey market premium shows

RR Kabel is set to make its debut on the Dalal Street on Wednesday, September 20, delivering a mild listing pop to the investors, if one goes by the signals from the grey markets. The FMEG player will become the first entity in the Indian stock markets to make a T+2 listing, which is listing after two working days from the closure of the issue.

Last heard, shares of RR Kabel were commanding a premium of Rs 95-100 in the grey market a day before its listing, signaling a listing pop of up to 10 per cent over its issue price. However, the premia in the unofficial market hovered around Rs 300-310 at the announcement of issue but later dropped to Rs 250 per shares when issue opened.

Analysts and experts tracking the grey market said that the recent volatility in the listed markets, correction in the midcap and smallcap stocks, mild listing gains by some of the recent listings and aggressive pricing of the issue is weighing on the listing prospects of the RR Kabel. However, others are positive on the company in the longer run.

RR Kabel is the fifth largest player in the wires and cable market and has potential to increase its market share. With Scaled B2C business in wires and cable industry, Extensive domestic and global distribution network, diverse suite of products, and strong financials, the company overall looks good and investors can hold medium to long term, said Mahesh M Ojha, AVP - Research at Hensex Securities.

The primary offering of RR Kabel was open for bidding between September 13-15 to raise a total of Rs 1,964 crore via IPO route. The company sold its shares in the fixed price band of Rs 983-1,035 apiece and investors could make a bid of a minimum of 14 shares and its multiples thereafter.

The issue of RR Kabels was overall subscribed 18.69 times, The portion for qualified institutional bidders (QIBs) was subscribed 52.26 times, while the allocation for non-institutional investors fetched 13.23 times bids. The reservation for retail investors was booked 2.13 times.

"We expect a decent listing for RR Kabel and shares may open at a premium of around 15 per cent to the issue price of Rs. 1,035 per share when it lists on the bourses," said Dhruv Mudaraddi, Research Analyst at StoxBox. "We remain positive on the company and advise investors who have received allotment to hold their shares from a medium to long term perspective."

Being one of the key players, RR Kabel is well-positioned to capture a significant share of growth in the wires and cables industry in India, owing to their longevity in the business, size and scale, B2C mix, scope to improve margins, and healthy cash flow growth going ahead, he said.

RR Kabel, incorporated in 1995, provides consumer electrical products used for residential, commercial, industrial, and infrastructure purposes in two major segments, namely wires and cables. Axis Capital, HSBC Securities & Capital Markets, Citigroup Global Markets India, and JM Financial were book running lead managers to the issue, while Link Intime India was the registrar.


Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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