Mangal Electrical IPO Sees Strong Demand, Commands 6% Grey Market Premium
Mangal Electrical Industries' Rs 400 crore IPO is oversubscribed 1.98 times on its second day of bidding. The grey market premium indicates a 6% increase over the issue price of Rs 561, suggesting a potential listing price of Rs 595. Retail and non-institutional investors show strong interest with subscription rates of 2.08 and 4.20 times respectively, while qualified institutional buyers remain cautious at 0.13 times. The company raised Rs 120 crore from anchor investors pre-IPO. Mangal Electrical Industries, a transformer components manufacturer, reported a 22% YoY revenue growth to Rs 551 crore and a 126% YoY profit increase to Rs 47 crore. Anand Rathi values the company at a P/E ratio of 32.8x and recommends a 'Subscribe - Long Term' despite considering the IPO fully priced.
*this image is generated using AI for illustrative purposes only.
Mangal Electrical Industries Limited's Initial Public Offering (IPO) is generating significant interest in the market, with a notable grey market premium on its final day of bidding. The Rs 400 crore IPO has caught investors' attention, reflecting positive sentiment towards the company's public debut.
Grey Market Premium
The IPO is currently trading at a 6% premium in the grey market over its issue price of Rs 561 per share. This indicates an expected listing price of approximately Rs 595, suggesting investor optimism about the company's market debut.
Subscription Status
By the end of the second day of bidding, the IPO has been oversubscribed, with an overall subscription rate of 1.98 times. The breakdown of subscription rates across different investor categories is as follows:
| Investor Category | Subscription Rate |
|---|---|
| Retail Investors | 2.08 |
| Non-Institutional Investors | 4.20 |
| Qualified Institutional Buyers | 0.13 |
The strong response from retail and non-institutional investors is particularly noteworthy, while qualified institutional buyers have shown a more cautious approach.
Anchor Investment
Prior to the public offering, Mangal Electrical Industries successfully raised Rs 120 crore from anchor investors. Notable participants in the anchor book include:
- Abakkus Diversified Alpha Fund
- Societe Generale
- Other institutional investors
This pre-IPO placement demonstrates institutional confidence in the company's prospects.
Company Overview
Mangal Electrical Industries specializes in manufacturing transformer components. The company serves a diverse clientele, including:
- State power distribution companies
- Private firms
Additionally, the company has expanded its reach internationally, with exports to the Netherlands and the United Arab Emirates.
Financial Performance
The company has reported strong financial growth:
- Revenue: Rs 551.00 crore (22% year-on-year growth)
- Profit: Rs 47.00 crore (126% year-on-year growth)
Valuation and Analyst Recommendation
Anand Rathi, a financial services firm, has valued Mangal Electrical Industries at a price-to-earnings (P/E) ratio of 32.8x. Despite considering the IPO fully priced at current levels, the firm has issued a 'Subscribe - Long Term' recommendation for investors.
The strong subscription rates, particularly from retail and non-institutional investors, coupled with the grey market premium, suggest robust demand for Mangal Electrical Industries' shares. However, the cautious approach of qualified institutional buyers indicates a more measured outlook from larger, institutional investors.
As the IPO enters its final stages, all eyes will be on the ultimate subscription figures and the company's performance upon listing.
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