Mangal Electrical Industries plans Rs 450-crore IPO, files DRHP with SEBI

Mangal Electrical Industries IPO

Rajasthan-based Mangal Electrical Industries plans to approach the primary market to raise Rs 450 crore via an initial public offering for its capacity expansion and working capital requirements. It has filed a draft red herring prospectus (DRHP) with the SEBI on December 24.

The IPO consists of an entirely fresh issue by the company, with no offer-for-sale component, hence the company received the entire IPO proceeds.

The transformer components manufacturer may raise up to Rs 90 crore (pre-IPO placement) before the filing of red herring prospectus with the Registrar of Companies for the IPO launch. If it is able to complete a pre-IPO placement, the said amount will be reduced from the fresh issue.

With five production facilities in Rajasthan, Mangal Electrical Industries also manufactures transformers and customised products in the power infrastructure industry, with transformers capacities ranging from single-phase 5 KVA to three-phase 10 MVA (medium power) units. It also provides EPC services for setting up electrical substations, catering to the power infrastructure sector.

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Its order book for all the business segments stood at Rs 97.87 crore as of November 2024. Governmental and municipal utilities such as Ajmer Vidyut Vitran Nigam and Jaipur Vidyut Vitran Nigam, and private sector energy producers such as Voltamp Transformers and Western Electrotrans are some of its customers.

Mangal Electrical will utilise Rs 96.03 crore out of fresh issue funds for repaying its debt. It had outstanding borrowings of Rs 209.05 crore as of November 15, 2024.

Further, Rs 120 crore will be used for expanding the facility at Unit IV at Sikar, Rajasthan, and civil works at its existing head office, Jaipur, Rajasthan to optimize space usage and increase storage capacity, while the Rs 122 crore will be utilised for working capital requirements, and the remaining IPO money for general corporate purposes.

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On the financials front, Mangal Electrical has reported a net profit of Rs 20.9 crore for the fiscal 2024, declining by 15.3 percent compared to Rs 24.7 crore in the previous fiscal. However, revenue jumped nearly 27 percent on-year to Rs 449.5 crore in the same period. For the six months ended September 30, 2024, the company reported a profit of Rs 19.73 crore on revenue of Rs 247 crore.

Systematix Corporate Services is appointed as the merchant banker for handling the public issue.