Mangal Electrical IPO: 10 Key Things To Know Before You Subscribe — Read Anand Rathi's Report

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Anand Rathi IPO Report

Mangal Electrical Industries Ltd.'s initial public offering will open for subscription on Aug. 20 and will conclude on Aug. 22.

Here are the 10 things to know before investing

1. The Jaipur-based integrated power infrastructure company engaged in manufacturing transformers and processing transformer components has fixed the price band in the range of Rs 533 to Rs 561 per equity share with a face value of Rs 10.

2. The IPO will open for subscription on Aug. 20 and will conclude on Aug. 22.

3. Investors can bid for at least a single lot size of 26 shares and in multiples thereof.

4. The Rs 400-crore IPO comprises of fresh issue of 71 lakh equity shares, with no offer-for-sale component.

5. Systematix Corporate Services Ltd. is the book running lead mangaer for th issue while Bigshare Services pvt. Ltd. is the registrar to the offer.

6. Objects of the Issue:

   Repayment/prepayment, in full or part, of certain borrowings availed by the company.

   Capital expenditure including civil works for the company.

   Funding of working capital requirements of the company.

   General corporate purposes.

7. Key Strengths:

   Promoters exhibit strong leadership and are supported by experienced senior management.

   Exhibition of certain approvals available to selected market players.

   Diversified base of customers.

   Strong backward and forward integration ensures operational efficiency.

   Proven track record of consistent growth.

8. Key Strategies:

   Expand manufacturing capacity at their existing facilities.

   Enhancement of their capacity by qualifying for 765 kV class approval issued by PGCIL.

   Establishing collaboration with CRGO mill suppliers.

   Expanding their existing product portfolios.

   Grow their customer base by diversifying into new geographies and maintain relationships with the key customers and other stakeholders.

9. Valuation & Outlook:

   Mangal Electrical Industries is an integrated power infrastructure company engaged in manufacturing transformers and processing transformer components such as CRGO slit coils, laminations, amorphous cores, and oil-immersed circuit breakers.

   With five state-of-the-art facilities in Rajasthan and certifications from NABL, PGCIL, and NTPC, the Company serves a diversified customer base across government utilities, PSUs, private energy producers, and international markets.

   Operating under the trusted brand “Mangal Electrical”, the Company is positioned as a leading player in high-capacity transformer solutions, including up to the 765 kV class. Their Board plans to expand manufacturing capacity through technology and infrastructure upgrades to meet rising demand for transformer components across key sectors.

   They are enhancing operational capacity by securing 765 kV class approval from PGCIL, which strengthens their technical capabilities, boosts competitiveness, and positions them to meet the growing demand for high-capacity transmission solutions.

   At the upper price band, the company is valued at a FY25 P/E of 32.8x, with a post-issue market capitalization of Rs 15,500 million.

   In recent years, India’s substation capacity has grown significantly, driven by rising electricity demand, creating a favorable environment for transformer manufacturing with consistent demand supporting production planning and operational efficiency. Based on these factors, the IPO appears fully priced, with a “Subscribe – Long Term” recommendation.

10. Key Risk:

    The costs of raw materials used in their manufacturing process are subject to volatility due to factors beyond their control. Any increase or fluctuation in raw material prices may have a material adverse effect on their business, financial condition, results of operations, and cash flows.

    They are heavily dependent on the performance of CRGO products and transformer product components. Any adverse changes in the conditions affecting the CRGO products and transformer products market may adversely impact their business, financial condition, results of operations, cash flows, and prospects.

    Any disruption, breakdown, or shutdown of their manufacturing facilities or their original equipment manufacturer suppliers may have a material adverse effect on their business, financial condition, results of operations, and cash flows.

    They do not have any direct hedging policy in place for mitigating raw material price fluctuations, particularly for CRGO and CRNO coils, which may adversely impact their business, financial condition, results of operations, and cash flows.

    Their dependence on a limited customer base and any change in customer composition may adversely impact on their business, financial condition, results of operations, and cash flows.

    They depend significantly on contract labor, and any inability to access contract labor at reasonable costs at their project sites may adversely affect their business.

    They are subject to raw material price volatility and foreign exchange fluctuations, which could adversely impact their business, results of operations, cash flows, and financial condition.

    They do not have definitive agreements regarding the supply of products or raw materials with their customers or suppliers. Failure to successfully leverage their supplier and customer relationships and network could adversely affect their business, financial condition, results of operations, and cash flows.

    Failure to protect and enforce their intellectual property rights, including trademarks and brand identity, could adversely impact their business, financial condition, and competitive position.

    They depend on third parties for the supply of raw materials and delivery of products, and any failure by such third parties to meet their obligations may have a material adverse effect on their business, results of operations, financial condition, and cash flows.

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