RR Kabel shares list at 14% premium, analysts cautious on upside
Shares of RR Kabel, a consumer electrical products company, made a decent start on the bourses on September 20, listing at a 14% premium over the issue price. However, analysts are cautious on the upside for the stock, given its subdued financials and a large offer for sale (OFS) portion.
The IPO of RR Kabel was subscribed 18.69 times, with qualified institutional investors bidding 52.26 times the allotted quota. High networth individuals and retail investors had bid 13.23 times and 2.13 times the reserved portion, respectively.
The company raised Rs 1,964.01 crore via the IPO, which comprised a fresh issue component of Rs 180 crore worth of shares and an OFS of Rs 1,784.01 crore worth of shares by six shareholders.
Revenue from operations remained robust at Rs 5,599 crore for FY23, rising 27.66% over the previous year. However, EBITDA (earnings before interest, tax, depreciation and amortisation) grew only 6.3% on-year to Rs 322.3 crore, while net profit fell 10% to Rs 188 crore.
Analysts had expected around a 10-15% premium for the stock, given the upbeat subscription numbers and positive equity market conditions. However, they believe that the subdued financials and a large OFS portion may limit upside for the stock going ahead.
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