Wires and cables manufacturer R R Kabel is set to become the first company to debut on the stock market within two days of issue closing. Following the subscription, RR Kabel’s shares are set to list on stock exchanges on September 20. Under the new SEBI listing timeframe, IPO firms are required to complete their listing process within three working days (T+3) from the conclusion of the IPO.
Notably, R R Kabel is voluntarily following the T+2 timeline, as SEBI has not made this deadline mandatory for IPO firms until December 1, 2023.
“Trading members of the exchange are hereby informed that effective from Wednesday, September 20, the equity shares of R R Kabel Ltd shall be listed and admitted to dealings on the exchange in the list of ‘B’ Group of Securities,” according to a circular issued by the BSE.
In August, the SEBI reduced the timeline for listing shares on stock exchanges after the conclusion of Initial Public Offerings (IPOs) from six days (T+6) to three days (T+3). This revised listing timeframe will be voluntary for all public issues launched on or after September 1, and it will become obligatory for all issues starting December 1, 2023.
The shortened timelines for listing and trading of shares will offer advantages to both issuers and investors, as per the market regulator. Ratnaveer Precision Engineering was the first company to list under the T+3 regime.
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R R Kabel IPO
R R Kabel’s Initial Public Offering (IPO) consists of a fresh issue amounting to Rs 180 crore and an offer-for-sale (OFS) segment comprising up to 1.72 crore equity shares. The IPO, valued at Rs 1,964 crore, garnered a subscription rate of 18.69 times. It was open for subscription from September 13 to September 15, with a price range of Rs 983 to Rs 1,035 per share.
Among the investor categories, the Qualified Institutional Buyers (QIBs) segment saw an overwhelming subscription rate of 52.26 times, as per exchange data. Non-institutional investors displayed strong interest, with a subscription rate of 13.23 times, while retail individual investors subscribed 2.13 times.
R R Kabel, a part of the R R Global Group, intended to use Rs 136 crore of the net proceeds from the fresh issue to reduce its debt.
This TPG-backed company operates five manufacturing units, including cable and wire facilities in Waghodia (Gujarat) and Silvassa (Dadra and Nagar Haveli), as well as a commercial lighting plant in Bengaluru.
The company intends to utilize the proceeds from the fresh issue to repay debt amounting to Rs 136 crore, with the remainder allocated for general corporate purposes.
As per a Mint report, Market observers say the grey market premium (GMP) for RR Kabel’s IPO was Rs 96 per share on September 19. Considering the upper end of the IPO price range and the existing premium in the grey market, the estimated listing price for RR Kabel’s IPO shares is Rs 1,131, representing a 9.3 per cent increase over the IPO price of Rs 1,035.
(Disclaimer: This report is meant only for information purposes. It should not be treated as a stock recommendation. Reader discretion advised.)