Under this category, Luminous recently introduced its series of energy-efficient star-rated premium designer fans in India. As part of the deal, RR Kabel will also have the right to use the Luminous brand for four years for the existing product lines of fans and lighting under a brand licensing agreement.

In 2013, Schneider acquired 74 per cent stake of Luminous Power and later in 2017, it acquired the balance 26 per cent. The Luminous divestment from Schneider comes more than 1.5 years after it had bought out the electrical and automation business of Larsen & Toubro for Rs14,000 crore.

With this deal, RR Kabel will now have access to the Rs300-crore revenue lighting and fan business of Luminous, taking its total home electrical business to around Rs700 crore. The company will also acquire Luminous’s fan-manufacturing facility in Himachal Pradesh (which has the capacity to make two lakh fans a month), R&D centre and sales infrastructure related to the home electrical business.

Before the Luminous deal, the company, in 2020, just before Covid, acquired a commercial LED lighting brand, Arraystorm, from Kores India. The brand has a manufacturing facility in Bengaluru. 

RR Kabel currently has its own facility at Roorkee in Uttarakhand for fans and lighting (fan capacity:1.25 lakhs per month), while it has recently set up a new facility for switches in Gujarat at an investment of around Rs50 crore. With all this, the company, also planning an IPO some time at the end of 2023, is looking to expand its home electrical goods business to around Rs2,000 crore in the next five-six years, while backed by other organic efforts in the wire & cables business.

It is aiming to take its total revenue to around Rs10,000 crore in the next two-three years from around Rs4,300 crore in FY22. It also plans to set up a new wire facility in Silvassa for a total outlay of around Rs100 crore. 

Inorganic growth

“We are on an exciting journey of expanding a value-added consumer-centric business, which outpaced the industry growth in FY22 by over 3x. Looking forward, the Luminous home electricals business will be a strong addition to our new chapter of growth, by leveraging its valued capabilities, including R&D strength, a state-of-the-art manufacturing facility, admired product portfolio and most importantly, a dedicated and highly capable team and channel partner network. This acquisition is an important milestone in our ambition of creating one of the leading national portfolios in the home electricals category over the next five-six years,” says Vivek Abrol, CEO, Consumer (FMEG) Business, RR Kabel.

“We are delighted to welcome the Luminous home electricals team and associates into the RR Global family and embark on a new journey together. Leveraging each other’s strengths, we are confident the collaboration will help expand our services and create greater value for all of our customers. At RR Kabel, we have always upheld the highest quality and safety standards for our customers, and Schneider’s faith in transferring their home electricals business to us stands as a testament to that. As a major player and innovation leader in the wire and cable industry, we believe the acquisition will further our leading position in India’s fast-growing home electrical industry,” states Kabra whose father Rameshwarlal Kabra (awarded the Padma Shri in 2018 by the President of India, Ram Nath Kovind, for his work in rural and tribal societies), the founder of the RR Global group, started the family business way back in 1963 in Indore, setting up a small retail shop for copper winding wire. 

In fact, his grandfather, Jagannath Kabra, had a textile trading business in Bangladesh. However, during Partition, the Marwari family shifted to Nepal. In 1963, his father, Rameshwarlal, separated from his father’s business and decided to come to India. The family shifted to Mumbai from Indore and put up a winding wire wholesale business in Mumbai’s famous Lohar Chawl area in 1966. Their first manufacturing foray happened in 1968 when they set up a small facility for making Double Cotton Cover (DCC) for copper winding wire in the Wadala area of Mumbai. 

This was followed by an aluminium winding wire making facility in Mumbai’s Bhandup area in 1969 and thereafter a copper winding wire facility in Vadodara in 1975 under the banner Shramik Winding Wire Pvt Ltd. This was followed by the country’s first dust-free winding wire facility at Waghodia near Vadodara (where RR Kabel currently has its wires and cables facility) in 1989. Meanwhile, the Kabra family also got into exports of textile and leather chemicals (Ram Ratna International) in 1991 and the business turned out to be a money spinner. 

Having made money from their exports business, in 1994 they set up a new winding wire facility in Silvassa under a new company, Ram Ratna Wires Ltd, which also got listed the same year and is currently the second largest super enamelled winding wire player in the country. In 1999, the family got into the wires and cables business, setting up a facility in Silvassa under the aegis of Ram Ratna Agroplast Ltd, which was later (in 2001) renamed RR Kabel Ltd. 

In 2010, the company set up another wire and cables facility in Waghodia. Thereafter, in the last few years, the company has ramped up its manufacturing capability in a big way. Apart from these two facilities for wires and cables, it also has a fans and lighting facility in Roorkee, Uttarakhand, which it brought under its fold by merging one of its group companies, Ram Ratna Electricals Ltd, in 2018. It has also brought another fans and lighting facility in Himachal Pradesh under its belt following the recent Luminous deal. It also has a commercial LED lighting unit in Bengaluru, which is the result of the Arraystorm deal. 

“We as a company have always believed in trusting our abilities which has also transpired into our brand ethos of quality, innovation and transparency. As a young man, I always had the dream of representing the brand and the company and my country on the global map which only became possible through RR Global. I always believe that a brand with a strong purpose is an ambitious brand and have always been a go-getter; every event brings an opportunity with it. Starting with a small trading company and now being one of the leading brands in the electrical sector, our journey has been full of memorable experiences and learnings.  My mantra is to always aim for the moon and if you miss it, you may hit a star,” says Rameshwarlal Kabra, 89, founder chairman, RR Global, who, though not involved in the business for some time now, has always been a guiding force for the family. 

Trustworthy brand

“Our brand, RR Kabel, was established with the aim of providing safety to everyone. Till today, it is our brand purpose to make safety a mandate whenever we talk about wires and cables. To be a successful and trustworthy brand, we should always focus on the bigger picture and yet be flexible in our approach. I always believe in investing in ideas that create sustainable business models. Our aim is to establish RR Kabel as the most trusted brand globally. For the same, we take special efforts to invest a lot in proper training and development, research and innovation and also in promoting talent. If innovation and quality is weaved in a key fabric in the DNA of the product, it becomes a global brand,” says Kabra whose two elder brothers, Tribhuvan Kabra and Mahendra Kabra, are also involved in the family business as chairman (RR Global) and joint managing director (RR Global), respectively.

While the company ramps up its portfolio, it is also strengthening its presence in the market where it competes with players like Polycab, Havells, KEI, Finolex Cables and others in the Rs50,000-crore wires and cables market which has been growing at 9-12 per cent per annum. In the fast-moving electrical goods space (domestic market size: Rs30,000 crore; growing at around 10 per cent) where it currently has a very small presence (though looking to increase its share in a big way going ahead), it is faced with a large number of national and regional brands ranging from Bajaj Electricals to Philips, and many more.

In fact, some of its wire and cable peers are now also present in this segment in a big way. RR Kabel is also looking to increase its presence in the cable business, in which, against the market mix of 60:40 in favour of cable, it has a 70 per cent portfolio in wires. However, it is increasing its exposure to cable. The company serves the market through 1,500-odd dealers and 30,000 retailers across the country; north and western regions are its stronghold. 

“RR Kabel has done quite well in the last few years, particularly since Akshay Kumar has come on board as its brand ambassador. Visibility has gone up significantly. Over the last few years, the company has also ramped up its portfolio in a big way. Most importantly, the company has shown a great deal of zeal and flexibility to adapt to market needs,” says Aditya Agarwal of Sun Shine Distributors, Jaipur which has been RR Kabel’s distributor for the last 10 years now.

With all these developments in place, RR Kabel is all set to strengthen its presence in the wires & cables space. In a strategic move, the company is now also aggressively diversifying into the fast-moving home electrical goods market, which will make its overall portfolio quite attractive and help build a strong brand in a market which is expanding.

The promoters have shown their ability and boast of a proven track record by having already set up a large business in electrical winding wire. They also have other successful businesses within the group and have shown excellent entrepreneurship skill over the years. Though RR Kabel is a relatively new business for the group, it is shaping up quite nicely. PE major TPG’s decision to pick up 21 per cent aptly validates their efforts and accomplishments.