IPO will list on 28 Aug'25
Mangal Electrical Industries Ltd
Minimum Investment
₹ 14,586 / 26 shares
Our Verdict:
Neutral
- Mangal Electrical Industries Ltd (MEIL) has shown strong revenue and earnings growth over the last three years. Among its listed peers, MEIL stands out with higher operating margins and stronger growth over the past two years. Additionally, its balance sheet will be further strengthened through debt reduction via IPO proceeds and its return ratios are superior to those of its peers.
- MEIL is currently approved to manufacture transformers up to 10 MVA and is expanding its capacity to the 132 kV class. This move will enhance its ability to serve power utilities and infrastructure developers, positioning the company as a preferred partner for high-capacity transmission projects.
- The IPO is priced at 33x based on FY25 earnings, using the post-IPO fully diluted equity capital. We believe this valuation fully captures the company’s growth potential, leaving limited room for substantial near-term upside.
- Considering these factors, we believe that any meaningful post-listing correction could offer a more attractive entry point for long-term investors.
About the company
Founded in
28 Apr'89
Managing director
Rahul Mangal
- MEIL specializes in the processing and manufacturing of transformer components, including transformer laminations, CRGO (cold rolled grain oriented) slit coils, amorphous cores, coil and core assemblies, wound cores, toroidal cores and oil-immersed circuit breakers (ICBs). It operates 5 production facilities in Rajasthan, with a dedicated unit for manufacturing transformer tanks for captive use.
- In addition, the company manufactures transformers ranging from 5 KVA single-phase to 10 MVA three-phase medium-power units and offers EPC services for electrical substations, supporting the power infrastructure sector.
STRENGTHS
- Strong Financial Performance: MEIL achieved impressive growth from FY23 to FY25, with a robust CAGR of 25% in operating revenue, 36% in EBITDA and 38% in net profit.
- Solid Return Ratios: MEIL demonstrates strong operational efficiency with a with a Return on Net Worth (RoNW) of 34.14% and a Return on Capital Employed (RoCE) of 25.38% in FY25, both of which are the highest among its listed peers.
- Healthy Profit Margins: Profitability has significantly improved from FY24 to FY25, with the EBITDA margin rising to 14.90% and the net profit margin increasing to 8.61% in FY25.
- Solid Order Book: As of June 30, 2025, MEIL’s order book across all business segments stands at Rs 294.19 crore, which provides strong revenue visibility.
- Diversified Client Base: MEIL serves a broad range of clients across power utilities, industrial conglomerates, infrastructure developers and public sector enterprises, reducing sector-specific risks. Key domestic clients include reputed names such as Transformer & Rectifiers, Siemens, Crompton Greaves, BHEL, while global clients include Voltamp (Oman), MTM (Malaysia) and Arab Trans (Egypt).
RISK FACTORS
- Revenue Concentration: In FY25, ~71% of MEIL’s revenue is concentrated in three states—Gujarat, Rajasthan and Uttar Pradesh. This heavy reliance on a few geographical markets exposes the company to concentration risk, especially if there are region-specific regulatory changes, market slowdowns or unforeseen disruptions.
- Client Concentration: In FY25, nearly 50% of revenue was generated from the top 10 customers. A loss or scale-down of orders from any major client could significantly impact financial performance.
- High Attrition: MEIL reported an attrition rate of 27.07% in FY25 and 33.52% in FY24, highlighting challenges in employee retention and the potential risk to service quality and operational continuity.
- Contingent Liabilities: As of March 31, 2025, contingent liabilities stood at ~Rs 79.5 crore. If these materialise, they could adversely impact the firm’s financial position.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 400 crore
Fresh Issue
₹ 400 crore
OFS
₹ -
Price range
₹ 533 - 561
Lot size
26 shares
Issue Objective
The net proceeds from the fresh issue are intended to be utilized for the following purposes:
- To prepay or repay certain outstanding borrowings availed by the company;
- To fund capital expenditure for expanding the facility at Unit IV located in Reengus, Sikar District, Rajasthan;
- To meet the working capital needs of the company; and
- For general corporate purposes.
Dates
Bidding open
20 Aug'25
Bidding close
22 Aug'25
Allotment date
25 Aug'25
Refund date
26 Aug'25
Listing
28 Aug'25
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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