Mangal Electrical Industries IPO: A High-Voltage Opportunity for Investors?

Mangal Electrical Industries IPO closed on August 22, 2025, has drawn significant attention due to the company’s integrated business model and robust financial growth. Listing on the BSE and NSE on August 28, 2025, the IPO offers investors a chance to tap into the growing demand for power transmission and distribution solutions. But will it deliver electrifying returns? Here’s an in-depth look at the IPO, the company’s fundamentals, and post-listing strategies for investors.

Mangal Electrical Industries IPO Highlights and Subscription Details

The Mangal Electrical Industries IPO is a book-built issue comprising a fresh issue of 71.3 lakh equity shares, with no offer-for-sale component, ensuring all proceeds go toward the company’s growth initiatives. Priced in the range of ₹533–₹561 per share, the IPO requires a minimum investment of ₹13,858 for retail investors (26 shares per lot). The subscription window saw strong interest, with the issue raising ₹120 crore from anchor investors before opening to the public.

Mangal Electrical Industries IPO Key details include:

• Subscription Dates: August 20–22, 2025
• Allotment Date: August 25, 2025
• Listing Date: August 28, 2025
• Price Band: ₹533–₹561 per share
• Lot Size: 26 shares for retail investors (₹13,858 minimum); 364 shares for small non-institutional investors (sNII, ₹2,04,204); 1,794 shares for big non-institutional investors (bNII, ₹10,06,434)
• Investor Quotas: 50% for Qualified Institutional Buyers (QIBs), 35% for Retail Individual Investors (RIIs), and 15% for Non-Institutional Investors (NIIs)
• Lead Manager: Systematix Corporate Services Ltd.
• Registrar: Bigshare Services Pvt. Ltd.

The grey market premium (GMP) for the IPO was reported at ₹20 per share as of August 19, 2025, suggesting a modest listing gain of approximately 3.6% over the upper price band of ₹561. However, GMP is speculative and not an official indicator of listing performance.

About Mangal Electrical Industries

Founded in 2008, Mangal Electrical Industries is a key player in India’s power infrastructure sector, specializing in the production of transformer components and complete transformer units. With five manufacturing facilities in Rajasthan, the company boasts an annual capacity of 16,200 MT for Cold Rolled Grain Oriented (CRGO) steel, 750,000 KVA for transformers, 75,000 units for oil-immersed circuit breakers (ICBs), and 2,400 MT for amorphous cores. Its product portfolio includes CRGO slit coils, amorphous ribbons, core assemblies, wound and toroidal cores, and transformers ranging from 5 KVA single-phase to 10 MVA three-phase units. The company also provides Engineering, Procurement, and Construction (EPC) services for electrical substations, having completed four turnkey projects.

Mangal Electrical serves a diverse customer base, including government utilities like Ajmer Vidyut Vitran Nigam and Jaipur Vidyut Vitran Nigam, as well as private players such as Voltamp Transformers and Western Electrotrans. Its export markets span the Netherlands, UAE, Oman, USA, Italy, and Nepal, reducing reliance on domestic demand. The company is NABL and PGCIL lab-approved and holds ISO 9001:2015 and ISO 14001:2015 certifications, underscoring its commitment to quality and sustainability. As of November 2024, its order book stood at ₹97.87 crore, reflecting strong demand visibility.

Financial Performance and Objectives

Mangal Electrical has demonstrated robust financial growth, with total income rising 22% from ₹452.13 crore in FY24 to ₹551.39 crore in FY25, and profit after tax (PAT) surging 126% from ₹20.95 crore to ₹47.31 crore over the same period. This performance highlights the company’s ability to scale operations and improve profitability amid rising demand for power infrastructure.

Mangal Electrical IPO proceeds will be utilized for:

• Debt Repayment: ₹101.26 crore to reduce outstanding borrowings, improving the debt-to-equity ratio to below 0.5x and enhancing earnings quality.
• Capital Expenditure: ₹87.86 crore for expanding the Unit IV facility in Reengus, Rajasthan, and civil works at the Jaipur head office to optimize storage and production capacity.
• Working Capital: ₹122 crore to support operational needs, addressing liquidity challenges posed by delayed payments from state utilities.
• General Corporate Purposes: Remaining funds to support strategic initiatives and operational flexibility.

Mangal Electrical Industries IPO Strengths and Risks

Strengths:

• Integrated Business Model: Mangal Electrical’s end-to-end capabilities, from raw material processing (CRGO and amorphous cores) to finished transformers and EPC services, provide pricing flexibility and customer stickiness.
• Sector Tailwinds: India’s ₹3 lakh crore Revamped Distribution Sector Scheme (RDSS), renewable energy integration, and urbanization drive demand for transformers and substations.
• Export Diversification: Presence in international markets mitigates risks tied to domestic DISCOM payment delays.
• Strong Financials: High revenue growth (22%) and PAT growth (126%) signal operational efficiency and scalability.
• Certifications and Approvals: NABL, PGCIL, and ISO certifications enhance credibility and market access.

Risks:

• Raw Material Volatility: Dependence on imported CRGO steel exposes the company to currency fluctuations and geopolitical risks, which could impact margins.
• Customer Concentration: Reliance on a limited number of clients, particularly state utilities with slow payment cycles, poses liquidity risks.
• Aggressive Valuation: The IPO’s P/E ratio, while competitive at 25.3x based on FY25 earnings, is considered high by some analysts compared to peers, potentially limiting upside.
• Cyclical Industry: The capital-intensive nature of the power sector makes it vulnerable to economic downturns, which could affect order inflows.
• Execution Risks: Delays in capacity expansion or mismatches in demand could extend payback periods and pressure returns.

Post-IPO Listing Strategy

Analysts have mixed views on Mangal Electrical’s IPO due to its strong fundamentals but premium pricing. Here are tailored strategies for investors:

• For Allotted Investors: Experts recommend holding shares for the medium to long term to capitalize on India’s power sector growth. The company’s diversified portfolio, export presence, and capacity expansion plans position it for sustained growth. Setting a stop-loss at ₹510–₹520 is advised to protect against short-term volatility. Anirudh Garg from INVasset PMS noted, “Mangal’s integrated platform and RDSS-driven demand make it a solid long-term bet, but investors should monitor raw material cost trends.”
• For Non-Allotted Investors: Those who missed the allotment may consider buying on a post-listing dip, ideally around ₹500–₹520, to enter at a more attractive valuation. The modest GMP of ₹20 suggests a flat-to-moderate listing, but any correction could offer a buying opportunity. Siddharth Maurya from Vibhavangal Anukulakara emphasized, “The power sector’s multi-year tailwinds make Mangal Electrical a compelling pick, but wait for a dip to optimize returns.”
• Risk Management: Investors should remain cautious of raw material price fluctuations and monitor the company’s progress in reducing debt and executing its Unit IV expansion. Regular updates on order book growth and DISCOM payment cycles will be critical.

Analyst Dilip Davda from Chittorgarh cautioned that the IPO appears “aggressively priced” based on FY24’s lower profitability, but FY25’s strong financials support a long-term investment case for well-informed investors with surplus funds. Anand Rathi analysts, however, see Mangal as a value buy, citing its diversified model and lower P/E compared to peers like Voltamp Transformers.

Industry Context and Growth Outlook

India’s power infrastructure sector is experiencing a transformative phase, driven by the government’s ₹3 lakh crore RDSS, renewable energy integration, and urbanization in Tier-2/3 cities. Mangal Electrical is well-positioned to benefit from these trends, with its 95% transformer utilization rate reflecting strong near-term demand. The company’s focus on expanding capacity and reducing debt aligns with the sector’s growth trajectory, though its reliance on imported CRGO steel remains a key risk.

The IPO market in 2025 has been vibrant, with mainboard issues like Regaal Resources (subscribed 160 times) and Vikram Solar (1.52x on Day 1) attracting significant interest. Mangal Electrical’s IPO, while more niche, benefits from the broader investor enthusiasm for infrastructure and energy plays.

Final Thoughts

Mangal Electrical Industries’ IPO offers a compelling entry into India’s high-growth power infrastructure sector, backed by strong financials and a strategic expansion plan. While the premium valuation and raw material risks warrant caution, the company’s integrated model, export diversification, and alignment with national energy goals make it an attractive long-term investment. Investors with a medium-to-long-term horizon should hold allotted shares with a stop-loss, while others may wait for a post-listing dip to enter. As always, consult a financial advisor and review the Red Herring Prospectus (RHP) before investing.

Disclaimer: Investments in IPOs carry market risks. Always consult certified financial experts and thoroughly review the RHP before making investment decisions.