Mangal Electrical Industries, a prominent transformer components manufacturer based in Rajasthan, has filed a draft red herring prospectus (DRHP) with SEBI to raise ₹450 crore through an initial public offering (IPO). This IPO will consist entirely of a fresh issue of equity shares, ensuring that the company receives the entire proceeds without any offer-for-sale component.
Key Objectives of the IPO:
- Debt Repayment: ₹96.03 crore will be utilized to repay outstanding borrowings, which stood at ₹209.05 crore as of November 15, 2024.
- Capacity Expansion: ₹120 crore will go toward expanding its Unit IV production facility in Sikar, Rajasthan, and enhancing its head office in Jaipur to optimize space and storage capacity.
- Working Capital: ₹122 crore will be allocated to meet working capital requirements.
- General Corporate Purposes: The remaining funds will be used for corporate purposes.
Pre-IPO Placement:
The company may raise up to ₹90 crore through a pre-IPO placement. If successful, this amount will reduce the size of the fresh issue.
Business Overview:
With five production units in Rajasthan, Mangal Electrical Industries manufactures a wide range of transformers and components, catering to both government utilities and private players. Its capabilities range from single-phase 5 KVA transformers to medium-power three-phase 10 MVA units. The company also provides EPC services for electrical substations, contributing to the power infrastructure sector.
Customer Base:
The company’s clientele includes governmental utilities like Ajmer Vidyut Vitran Nigam and private sector leaders like Voltamp Transformers.
Financial Performance:
For FY24, Mangal Electrical reported:
- Revenue: ₹449.5 crore, up 27% YoY.
- Net Profit: ₹20.9 crore, a decline of 15.3% compared to FY23.
For the June 2024 quarter, the company recorded a profit of ₹19.73 crore on revenue of ₹247 crore.
Order Book:
The order book stood at ₹97.87 crore as of November 2024.
Objects of the Issue
| Objects | Estimated Amount (₹ in lakhs) |
|---|---|
| Repayment/prepayment of outstanding borrowings | 9,602.76 |
| Capital expenditure for facility expansion | 12,000.00 |
| Funding working capital requirements | 12,200.00 |
| General corporate purposes | [●] |
| Total | 45,000.00 |
Summary of Restated Financial Information
| Particulars | For the six-month period ended September 30, 2024 | For the financial year ended March 31, 2024 | For the financial year ended March 31, 2023 | For the financial year ended March 31, 2022 |
|---|---|---|---|---|
| Equity share capital (₹ in lakhs) | 2,050.00 | 1,450.00 | 1,450.00 | 1,450.00 |
| Net worth (₹ in lakhs) | 13,456.40 | 11,498.76 | 9,397.16 | 6,921.55 |
| Revenue from operations (₹ in lakhs) | 24,701.79 | 44,948.45 | 35,430.88 | 25,664.75 |
| Restated profit/(loss) (₹ in lakhs) | 1,973.27 | 2,094.86 | 2,473.81 | 919.52 |
| Restated earnings/(loss) per equity share | 9.63 | 10.22 | 12.07 | 4.49 |
| NAV per equity share (₹) | 65.64 | 56.09 | 45.83 | 33.76 |
IPO Management:
Systematix Corporate Services has been appointed as the merchant banker for the IPO.
This IPO marks a significant step in Mangal Electrical’s journey toward expanding its capacity and meeting its operational goals, positioning it strongly in the power infrastructure sector.
