Mangal Electrical stock lists at discount despite strong IPO demand

Mangal Electrical Industries made its stock market debut today with its shares listing slightly below the issue price. Despite the initial public offering (IPO) attracting significant investor interest, with a subscription rate of 9.46 times during the offer period from August 20 to 22, the shares listed at Rs 556 on the National Stock Exchange (NSE) and Rs 558 on the Bombay Stock Exchange (BSE). This amounts to a discount of 0.89% and 0.53%, respectively, from the upper end of its issue price band, which was set between Rs 533 and Rs 561 per share. The company's market capitalisation post-listing was recorded at Rs 1,541.76 crore.

The proceeds from Mangal Electrical's Rs 400-crore IPO are earmarked for several strategic objectives. The company plans to utilise the funds to reduce its debt, expand its production facility in Rajasthan, and bolster its working capital for general corporate purposes.

The listing performance of Mangal Electrical on the stock exchanges mirrors the expectations set by the grey market, which had anticipated a discount. Prior to the IPO, the company secured Rs 120 crore from anchor investors. This listing marks a significant step for Mangal Electrical in scaling its operations and enhancing its market presence. The IPO's proceeds are expected to be pivotal in facilitating the company's growth and operational improvements.

Mangal Electrical is known for processing transformer components, including transformer lamination, amorphous cores, and oil-immersed circuit breakers. Its client base includes government electricity distribution companies and private firms such as Ajmer Vidyut Vitran Nigam Ltd and Voltamp Transformers Ltd. Additionally, Mangal Electrical exports its products to international markets, including the Netherlands, UAE, Oman, the US, Italy, and Nepal.