Mangal Electrical Industries, based in Rajasthan, intends to go to the primary market in order to raise Rs 450 crore through an IPO in order to fund its working capital needs and capacity expansion. On December 24, it submitted a draft red herring prospectus (DRHP) to SEBI.

The company will recive all of the IPO proceeds because it is a completely new issue that has no offer-for-sale component.

Prior to filing a red herring prospectus with the Registrar of Companies for the IPO launch, the manufacturer of transformer components may raise up to Rs 90 crore (pre-IPO placement). The aforementioned sum will be deducted from the new issue if it is successful in completing a pre-IPO placement.

Total order book

As of November 2024, the total value of its order book across all business segments was Rs 97.87 crore. Its clients include private sector energy producers like Voltamp Transformers and Western Electrotrans, as well as governmental and municipal utilities like Ajmer Vidyut Vitran Nigam and Jaipur Vidyut Vitran Nigam.

Use of IPO proceedings

Mangal Electrical will pay back its debt with Rs 96.03 crore of newly issued funds. As of November 15, 2024, it owed Rs 209.05 crore in outstanding debt.

Additionally, in order to maximize space utilization and boost storage capacity, Rs 120 crore will be used for civil works at its current head office in Jaipur, Rajasthan, and the expansion of the facility at Unit IV in Sikar, Rajasthan. The remaining IPO funds will be used for general corporate purposes, and Rs 122 crore will be used for working capital requirements.

Company financials

For the fiscal year 2024, Mangal Electrical reported a net profit of Rs 20.9 crore, a 15.3 per cent decrease from the previous fiscal year's net profit of Rs 24.7 crore.

At Rs 449.5 crore during the same time period, revenue increased by almost 27 per cent year over year. With Rs 19.73 crore in revenue, the June 2024 quarter's profit was Rs 247 crore.