The initial public offering of Mangal Electrical Industries Ltd, a manufacturer of transformer components, was subscribed 1.98 times by the second day of bidding on Thursday.
The non-institutional investors’ category saw a subscription rate of 4.20 times, while the allocation for Retail Individual Investors (RIIs) was subscribed 2.08 times. The portion reserved for Qualified Institutional Buyers (QIBs) only received a 13 percent subscription.
On Tuesday, Mangal Electrical Industries raised ₹120 crore from its anchor investors.
Mangal Electrical Industries specialises in processing transformer components, including transformer lamination, amorphous cores, coil assemblies, core assemblies, wound core, toroidal core, and oil-immersed circuit breakers.
Notable customers include government discoms and private firms such as Ajmer Vidyut Vitran Nigam Ltd, Jaipur Vidyut Vitran Nigam Ltd, Voltamp Transformers Ltd, and Western Electrotrans. The company has also exported its transformer components to countries including the Netherlands, the United Arab Emirates, Oman, the U.S., Italy, and Nepal.
Mangal Electrical IPO GMP today is +34. This indicates Mangal Electrical share price were trading at a premium of ₹34 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Mangal Electrical share price was indicated at ₹595 apiece, which is 6.06% higher than the IPO price of ₹561.
Mangal Electrical IPO Review
As per Canara Bank Securities, the company operates in an environment with high working capital requirements, importing approximately 80% of its CRGO steel, with raw materials comprising around 40% of total costs. The planned capital expenditure of ₹95–100 crore will be carried out over the next 18 months, financed through the IPO, which totals ₹400 crore (including ₹100 crore for capex, ₹100 crore for debt repayment, ₹100 crore for working capital, and ₹80 crore for general purposes).
The EPC segment contributes 5–10% to the revenue as part of its forward integration strategy. With a price-to-earnings ratio of 24.3x compared to the peer average of 26x, the current valuations seem fair. The brokerage advises subscribing for long-term benefits, although profit margins are susceptible to fluctuations in raw material prices, as demonstrated in FY24 when costs increased by 21%.
Mangal Electrical IPO details
The Mangal Electrical IPO, which is a fresh issue of shares totaling ₹400 crore, will end on Friday. Mangal Electrical IPO price band has been set at ₹533-561 per share.
The funds from the new share issue will be utilised for repaying debt, expanding the company’s facility located in Rajasthan, and meeting working capital needs for general corporate purposes.
Systematix Corporate Services serves as the sole book-running lead manager, while Bigshare Services is the registrar for the issue.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
