Mangal Electrical IPO subscribed 2% on Day 1 so far; GMP 4%. Should you subscribe?
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Mangal Electrical IPO Issue Details
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The recently launched Rs 400 crore IPO of Mangal Electrical Industries was subscribed 2% on Wednesday so far, the first day of bidding.The Grey Market Premium (GMP) for the IPO stands at a modest 4.4% above the issue price band of Rs 561. The subscription window will remain open until August 22.The Grey Market Premium (GMP) for the Mangal Electrical IPO is currently Rs 25 above the upper price band of Rs 561. The GMP reflects the premium investors are willing to pay for shares in the unofficial market before the IPO listing. Based on this premium, the estimated listing price is expected to be around Rs 586, which represents a relatively modest gain of approximately 4.46% over the issue price. This suggests moderate investor enthusiasm for the stock at listing.As of 10:10 am on the first day of bidding, the Mangal Electrical IPO achieved a 2% overall subscription. Breaking this down, the retail investor segment showed relatively stronger interest with a 3% subscription rate, while the non-institutional investor (NII) category had subscribed to just 1% of the issue. So far, no bids have been received from qualified institutional buyers (QIBs), indicating limited participation from this segment early in the subscription period.Transformer components manufacturer Mangal Electrical Industries raised Rs 120 crore from anchor investors on Tuesday, just a day before its initial public offering (IPO) opened for public subscription.The anchor investors participating in this round included Abakkus Diversified Alpha Funds, LC Pharos Multi Strategy Fund VCC, Societe Generale, Finavenue Capital Trust , Swyom India Alpha Fund, Sundaram Alternative Investment Trust, Imap India Capital Investment Trust, Sunrise Investment Trust, and Aarth AIF Growth Fund, according to a circular posted on the BSE website.The company allotted 21.39 lakh equity shares to these institutional investors at the upper price band of Rs 561 per share, resulting in total anchor investor fundraising of Rs 120 crore.The IPO, comprising a fresh issue of shares worth Rs 400 crore, is scheduled to open for public subscription on August 20 and will close on August 22. The price band has been set between Rs 533 and Rs 561 per share.Proceeds from the fresh issue are intended to be utilized for repaying debt, expanding the company's manufacturing facility in Rajasthan, and meeting working capital requirements and other general corporate purposes.Mangal Electrical Industries specializes in manufacturing transformer components, including transformer laminations, amorphous cores, coil assemblies, core assemblies, wound cores, toroidal cores, and oil-immersed circuit breakers.Its clientele includes government power distribution companies as well as private firms such as Ajmer Vidyut Vitran Nigam Ltd, Jaipur Vidyut Vitran Nigam Ltd, Voltamp Transformers Ltd , and Western Electrotrans. The company also exports transformer components to countries including the Netherlands and the United Arab Emirates. Systematix Corporate Services is appointed as the sole book-running lead manager for the issue, while Bigshare Services serves as the registrar.According to Anand Rathi's research report, at the upper price band, the company is valued at a FY25 price-to-earnings (P/E) ratio of 32.8x, with a post-issue market capitalization of Rs 15,500 million. In recent years, India's substation capacity has expanded significantly due to increasing electricity demand. This growth has created a favorable environment for transformer manufacturing, characterized by steady demand that supports effective production planning and operational efficiency. Considering these factors, the IPO is viewed as fully priced, and Anand Rathi recommends a 'SUBSCRIBE – LONG TERM' rating.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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