Mangal Electrical Industries submits DRHP to raise ₹450 crore via IPO

Recently the Jaipur-based company, Mangal Electrical Industries filed a Draft red herring prospectus (DRHP) with SEBI to raise funds through an IPO. This IPO will be entirely a fresh issue of ₹450 crores with no offer-for-sale component.

The company might raise ₹90 crore as a pre-IPO placement before raising funds through an IPO using methods like preferential allotment or rights issues. If the plan of raising ₹90 crores through pre-IPO placement is successful, the ₹90 crores will be deducted from the total planned amount ₹450 crores of fresh issues planned for the IPO.

The objective behind raising funds through an IPO is to utilize it for many purposes. Out of the amount, ₹96.03 crore will be utilized to settle the company’s previous borrowings. For various capital expenditures like growing the facility at Unit IV in Reengus, Sikar District, Rajasthan ₹120 crore money will be used. The company is planning to renovate its head office in Jaipur expecting it to be more spacious than before. Out of the total, ₹122 crores of funds will be utilized to complete the company’s general corporate purposes. 

A maximum of 50% of the allocation of the issue is reserved for QIB, 15% for non-institutional investors, and 35% for retail individual investors.

About the Company

Mangal Electrical Industries is one of the growing companies to manufacture transformer components and lamination. The company profile consists of various products such as CRGO slit coils, amorphous cores, coil assemblies and core assemblies, wound cores, toroidal cores, and oil-immersed circuit breakers. They are also known for trading CRGO and CRNO coils, as well as amorphous ribbons. Moreover, the company also manufactures customized products used in the power infrastructure industry. They manufacture transformers with capacities from small single-phase 5 KVA units to larger three-phase 10MVA units. They also offer EPC services to build an electrical substation for the power infrastructure sector. 

With a massive manufacturing capacity of 16,200 MT for CRGO, 7,50,000 KVA for transformers, 75,000 units for ICB, and (iv) 2,400 MT for amorphous units annually, Mangal Electrical Industries currently operates five production sites in Rajasthan.

In the Fiscal year 2024, the company raised ₹449 crore of revenue from operations. While the Net profit after tax increased from 919 crore in FY2022 to 2,473.82 crore in FY2023.

The lead manager of this IPO is Systematix Corporate Services. The registrar of this issue is Bigshare Services Private Limited. The equity shares of this IPO will be listed on both the BSE (Bombay Stock Exchange) & NSE (National Stock Exchange) respectively.

Mangal Electrical IPO Prospectus:

Mangal Electrical Company Financial Report

Amount ₹ in Crores

Mangal Electrical IPO Valuation – FY2024

Mangal Electrical IPO valuations detail like Earning Per Share (EPS), Price/Earning P/E Ratio, Return on Net Worth (RoNW), and Net Asset Value (NAV) details.

Peer Group Comparison

Objects of the Issue

• Repayment/prepayment, in full or in part, of certain outstanding borrowings availed by our Company;
• Capital expenditure of our Company for expanding the facility at Unit IV situated Reengus, Sikar District,
  Rajasthan and civil works at its existing head office, Jaipur, Rajasthan to optimize space usage and
  increase storage capacity;
• Funding working capital requirements of our Company; and
• General corporate purposes (collectively, the “Objects”).

IPO Lead Managers aka Merchant Bankers

• Systematix Corporate Services Limited