R R Kabel approves Rs 77 crore U M Cables acquisition to enter optical fibre cable market

R R Kabel Ltd has approved the acquisition of the business undertaking of U M Cables Ltd, a wholly owned subsidiary of Usha Martin Ltd, for a lump-sum cash consideration of Rs 77 crore. The transaction, structured as a slump sale on a going-concern basis, will mark R R Kabel’s entry into the optical fibre cable segment.

U M Cables manufactures and sells optical fibre and related cables. For R R Kabel, the acquisition provides an operating platform with manufacturing assets, product approvals and an established track record, potentially allowing it to enter the segment faster than through a greenfield build-out.

The move broadens R R Kabel’s presence beyond its existing portfolio of house wires, industrial wires, power cables, speciality cables and Solar cables. Optical fibre cables are used in communication infrastructure, where network expansion, data centres, telecom connectivity and broader digital infrastructure can create demand for specialised cable systems.

Rajesh Kabra, Joint Managing Director of R R Kabel, said the acquisition would strengthen the company’s presence in communication infrastructure and provide ‘a strong foundation in OFC while significantly shortening the time required to build these capabilities organically’.

The Rs 77 crore consideration is modest relative to R R Kabel’s current operating scale. The company reported net sales of Rs 3,168.2 crore in the June 2026 quarter, making the acquisition value equivalent to about 2.4 per cent of quarterly sales. However, the strategic significance lies less in the size of the transaction and more in adding a new cable category with existing manufacturing capabilities and approvals.

The acquisition also fits with R R Kabel’s stated emphasis on expanding its higher-value cable portfolio and deepening its business-to-business presence. Its wires and cables segment accounted for 91 per cent of revenue in the June 2026 quarter, while segment revenue rose to Rs 2,880 crore from Rs 1,833.5 crore a year earlier. Segment margin improved to 9.9 per cent from 7.6 per cent in the corresponding quarter.

Management has previously identified infrastructure, renewable energy, transmission networks, industrial projects and data centres as areas that could support cable demand. It has also indicated that cable capacity utilisation was around 90 per cent, compared with about 65 per cent to 70 per cent for wires, reinforcing the company’s focus on cable-led growth and capacity additions.

The deal gives R R Kabel an entry route into optical fibre cables, but the company has not disclosed U M Cables’ revenue, profitability, capacity, customer base or expected transaction completion timeline. The financial benefit will therefore depend on R R Kabel’s ability to integrate the acquired business, retain approvals and customers, and use its distribution reach and institutional relationships to scale the platform.

As of 3:52 PM on September 25, 2026, R R Kabel shares were trading at Rs 2,527.00, down 0.2 per cent from the previous close of Rs 2,532.15. The stock has gained 102.48 per cent over the past year, compared with a 4.14 per cent decline in the BSE 500 over the same period. It was about 13.8 per cent below its 52-week high of Rs 2,930.55.

Disclaimer: The article is for informational purposes only and not investment advice.