Mangal Electrical IPO Day 2: Moderate Subscription Growth, GMP Stable

Mangal Electrical Industries Limited, a trusted name in transformer components, saw its IPO subscription rise to 2.08 times by Day 2, up from 0.57 times on Day 1. Non-Institutional Buyers led this gain with a robust 4.42 times subscription, while retail investors increased their participation to 2.19 times. Qualified Institutional Buyers remained cautious at 0.14 times. The GMP held steady at ₹34 after rising from ₹25 pre-IPO to ₹33 on Day 1, signaling measured investor optimism. This article provides a clear look at Mangal Electrical’s business fundamentals, subscription trends, GMP movements, and risks, helping investors understand the opportunity at hand.

IPO Overview

• IPO Date: August 20 to August 22, 2025
• Total Issue Size: ₹400 crore
• Price Band: ₹533 to ₹561 per share
• Lot Size: 26 shares per lot
• Tentative Allotment Date: August 25, 2025
• Listing Date: August 28, 2025 (Tentative)
• Subscription Status: 2.08 times as of day 2.
• GMP: The GMP for Mangal Electrical is ₹34, according to Chittorgarh.com (as of August 21).
  Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

Highlight of Day 2 of the IPO

On Day 2, Mangal Electrical’s IPO subscription increased to 2.08 times, driven by strong Non-Institutional Buyer participation at 4.42 times and rising retail interest at 2.19 times, while QIB subscription remained low at 0.14 times. The GMP remained steady at ₹34, reflecting steady but cautious market sentiment as investors consider the company’s prospects.

Highlight of Day 1 of the IPO

On Day 1, Mangal Electrical IPO received a modest 0.57 times subscription, with Non-Institutional Buyers participating strongly relative to others at 0.76 times. Retail investors subscribed at 0.74 times, while institutional interest lagged at 0.13 times. The GMP rose from ₹25 before the IPO to ₹33 on Day 1, signaling cautious yet positive market sentiment as investors evaluate the company’s growth prospects.

Business Model of Mangal Electrical

Mangal Electrical makes the building blocks for the transformers that keep India’s power flowing, from intricate laminations and amorphous cores to full-on transformers up to 10 MVA. Its five factories deliver everything from small units for local grids to giant machines for national infrastructure. Customers span government utilities, big industries, and private infrastructure developers. Most sales come from three big states, Gujarat, Rajasthan, and Uttar Pradesh, though it also ships abroad. Approvals like NABL and PGCIL let it supply mission-critical, high-voltage projects, and its big order book hints at a steady pipeline.

Objectives of the IPO

• Loan Repayment: ₹101.26 crore to lower the ₹254.88 crore outstanding debt, aiming for a healthier balance sheet.
• Facility Expansion: ₹87.85 crore pumped into expanding manufacturing at its Rajasthan Unit IV, civil works, and new machines.
• Working Capital: ₹122 crore earmarked for daily needs, funding inventory, production, and operations.
• Total Fresh Issue: All money goes into business growth, not to exiting shareholders.

Strengths:

• Strong Growth & Profits: Revenue jumped 24.5% per year to ₹549.4 crore in FY25; net profit margin climbed to 8.61% (₹8.61 earned per ₹100 sales).
• Industry Approvals: NABL, PGCIL, and ISO certifications mean high-quality products eligible for bigger, more lucrative projects.
• Operational Leadership: Highest EBITDA margin (14.90%) among peers, more profit from every rupee of revenue.
• Diverse Customer Mix: 128 customers, including government and private sector, limits dependence on any one buyer.
• Integrated Model: Processes key materials in-house, controls quality and costs across transformer manufacturing.

Risks:

• Regional Revenue Bias: 71% of FY25 revenue from three states, economic or policy swings could hit hard.
• Debt Heavy: Debt-to-equity at 0.92, higher than many peers, relying more on loans for growth.
• Import Reliance: 57% of imported materials come from China, exposed to supply chain risks or cost shocks if trade sours.
• Working Capital Drag: Takes 131 days to convert working capital into cash; longer cycles mean tighter liquidity.
• Customer Concentration: Top 10 clients bring in nearly half the revenue; losing a major contract could hurt results.
• Underutilized Units: Some factories running well below capacity, not yet squeezing maximum potential from assets.

For detailed information, visit Mangal Electrical’s IPO page.

Peer Comparison

Mangal Electrical’s listed industry peers include Vilash Transcore and Jay Bee Lamination.

Source: RHP, internal calculation

IPO Valuation

The IPO prices Mangal Electrical at a P/E of 24.3, in line with mid-sized manufacturing standards and lower than its closest peer, Vilash Transcore, but above Jay Bee Lamination. In simple words, investors are paying ₹24.3 for every ₹1 of profit for Mangal Electrical.

Disclaimer: The P/E ratio here is calculated using the company’s post-IPO equity and its most recent FY25 net profits at the upper end of the price band.

The People Behind the Company

The company’s growth has been shaped by its promoter family, Rahul Mangal (Chairman & MD), with 35+ years pioneering in power distribution and setting quality benchmarks; Ashish Mangal (Non-Executive Director), leveraging decades in cable and conductor production; and Saroj Mangal, a stalwart presence since inception. Aniketa Mangal, Executive Director, adds drive from business development and process streamlining since 2016. Their strategic leadership is complemented by experienced professionals in finance, marketing, and operations, like CFO Pawan Mendiratta, COO Shekhawat Anilkumar, and CMO Gaurav Bhatt.

Industry Outlook

India’s transformer and T&D component sector sits at the heart of its rapid urban, industrial, and renewables growth. As peak electricity demand surges towards 277 GW in FY27 and 366 GW by FY32, ongoing government investments and grid upgrades power sustained demand for transformer components and EPC services. Material price swings and regional/customer concentration are persistent challenges, but market expansion and substitution for old infrastructure offer robust opportunities for well-managed firms with quality credentials.

Analyst View

Mangal Electrical’s gradual increase to a 2.08x subscription by Day 2, along with a steady GMP of ₹34, suggests investors are approaching the IPO with balanced views focused on fundamentals rather than hype. The company’s strong order book, solid EBITDA margins, and key industry certifications underpin its potential to benefit from India’s expanding power infrastructure. However, subdued QIB interest signals caution around challenges such as execution risks, elevated debt levels, and long working capital cycles.

With a fair valuation reflected in a mid-20s P/E ratio, Mangal Electrical offers potential upside provided it strengthens cash flow and expands beyond its regional base. Investors seeking exposure to power transmission equipment can find value here, but patience and close scrutiny of financial progression and sector trends remain essential. This measured subscription and stable GMP reinforce a market verdict that balances optimism with prudence, acknowledging both growth prospects and ongoing challenges.

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Disclaimer

Source: Mangal Electrical's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.