Mangal Electrical IPO Makes Muted Debut with 1% Discount

Mangal Electrical Industries Limited, the transformer components manufacturer, made a muted debut on BSE and NSE on August 28, 2025. After closing its IPO bidding between August 20-22, 2025, the company commenced trading with a modest 1% discount at ₹556 on NSE and ₹558 on BSE, falling slightly below the issue price of ₹561 and reflecting cautious investor sentiment towards the electrical equipment sector.

Mangal Electrical Listing Details

Mangal Electrical Industries Limited launched its IPO at ₹561 per share with a minimum investment of 26 shares costing ₹14,586. The IPO received a strong response with a subscription of 9.95 times - NII leading at 19.78 times, QIB at 11.09 times, and retail investors at 5.09 times, indicating solid institutional and high net worth investor interest in the transformer manufacturing business.

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First-Day Trading Performance Outlook

Listing Price: The Mangal Electrical share price opened at ₹556 on NSE and ₹558 on BSE, representing slight discounts of 0.9% and 0.5% respectively from the issue price of ₹561, delivering modest losses for investors and falling below market expectations.

Growth Drivers and Challenges

Growth Drivers:

Strong Financial Recovery: Revenue increased by 22% to ₹551.39 crore in FY25 with PAT surging by 126% to ₹47.31 crore, reflecting robust demand for electrical equipment and significant operational improvements.

Market Leadership Position: Established manufacturer of transformer components with strong brand recognition under "Mangal Electrical" brand, serving critical electricity distribution and transmission infrastructure.

Integrated Operations: Strong backward and forward integration with five production facilities in Rajasthan ensuring operational efficiency and cost optimization across the value chain.

Diversified Product Portfolio: Comprehensive range including CRGO coils, transformer assemblies, and EPC services for electrical substations providing multiple revenue streams and market opportunities.

Challenges:

High Debt Burden: Debt-to-equity ratio of 0.92 with total borrowings of ₹149.12 crore creating financial leverage concerns affecting cash flow generation capabilities.

High Valuation Metrics: Post-IPO P/E ratio of 32.77 and Price to Book Value of 7.09 indicating premium pricing that contributed to modest listing performance.

Cyclical Industry Nature: Electrical equipment sector's dependence on infrastructure development and economic cycles exposes the company to market volatility and demand fluctuations.

Previous Profitability Volatility: Inconsistent profit patterns with setbacks in FY24 due to cost escalations raising concerns about earnings sustainability.

Utilisation of IPO Proceeds

Working Capital Requirements: ₹122 crore for funding working capital needs supporting business operations and inventory management in the electrical equipment sector.

Debt Reduction: ₹101.27 crore for repayment or prepayment of outstanding borrowings, improving the capital structure and reducing financial leverage burden.

Capacity Expansion: ₹87.86 crore for capital expenditure including civil works for expanding facilities at Unit IV in Rajasthan, enhancing production capabilities.

Financial Performance of Mangal Electrical

Revenue: ₹551.39 crore for FY25, showing strong growth of 22% from ₹452.13 crore in FY24, reflecting robust demand for transformer components and market expansion.

Net Profit: ₹47.31 crore in FY25, representing remarkable growth of 126% from ₹20.95 crore in FY24, indicating substantial operational improvements and margin recovery.

Financial Metrics: Strong ROE of 29%, impressive ROCE of 25.38%, debt-to-equity ratio of 0.92, solid RoNW of 34.14%, healthy PAT margin of 8.61%, robust EBITDA margin of 14.90%, Price to Book Value of 7.09, and market capitalisation of ₹1,550.05 crore.