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Key Points

Mangal Electrical Industries is preparing for its Rs 450 crore IPO despite experiencing a 15.32% net profit decline in FY24. The company's financial documents reveal rising total expenses while maintaining revenue growth of 26.86%. The IPO will support strategic initiatives including facility expansion and debt repayment across multiple locations. Investors will find the company's listing on NSE and BSE an interesting opportunity in the electrical equipment sector.

Key Points: Mangal Electrical IPO Reveals 15% Profit Drop in FY24

  • Revenue grows 26.86% despite profitability challenges
  • IPO funds targeted for borrowing repayment and expansion
  • Company plans strategic capital expenditure in Rajasthan facility
  • Total expenses surge 30.49% in fiscal year
2 min read

IPO-bound Mangal Electrical's net profit falls 15 pc in FY24 as expenses rise, shows DRHP

Jaipur-based Mangal Electrical plans Rs 450 crore IPO despite profit challenges and rising operational expenses

"Navigating financial complexities while pursuing strategic expansion - Financial Analyst Perspective"

Mumbai, June 12

Jaipur-based Mangal Electrical Industries has received final approval from the Securities and Exchange Board of India (SEBI) to launch its initial public offering (IPO) worth Rs 450 crore.

While the IPO marks a major step forward for the company’s future expansion, its financial details for FY24 reveal a challenging year with rising costs and falling profits.

As per the draft red herring prospectus (DRHP) filed with SEBI, Mangal Electrical’s net profit dropped by around 15.32 per cent in the financial year ended March 31, 2024.

The company reported a profit of Rs 20.94 crore in FY24 compared to Rs 24.73 crore in the previous financial year (FY23).

The company’s total expenses surged by 30.49 per cent to Rs 424.02 crore in FY24, compared to Rs 324.94 crore in FY23.

This fall in profit came despite revenue growth. The company's revenue from operations rose to Rs 449.48 crore in FY24, up from Rs 354.3 crore in FY23, marking an increase of about 26.86 per cent.

Total income also saw a similar growth of 26.36 per cent, reaching Rs 452.13 crore in FY24.

The IPO, which involves a fresh issue of shares with no offer-for-sale (OFS) component, will have a face value of Rs 10 per share.

Out of the Rs 450 crore to be raised, Mangal Electrical plans to use Rs 96.03 crore to repay or prepay certain borrowings.

Around Rs 120 crore will go towards capital expenditure, including the expansion of its Unit IV facility in Reengus, Rajasthan, and improvements at its Jaipur headquarters.

Additionally, Rs 122 crore will be used to meet working capital needs and other general corporate purposes.

Systematix Corporate Services Limited is the sole book-running lead manager for the IPO, and Bigshare Services Private Limited is the registrar.

The company’s shares are proposed to be listed on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

- IANS

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Reader Comments

R
Rajesh K.
Interesting move by Mangal Electrical to go for IPO despite profit decline. The 30% expense jump is concerning but their revenue growth shows potential. Rajasthan's manufacturing sector needs more such companies. Will wait for listing price before deciding to invest. 🤔
P
Priya M.
As someone from Jaipur, it's good to see local companies expanding. But why such high expenses? Management should explain this clearly to investors. Using IPO money for debt repayment (₹96cr) seems smart though. Hope they utilize funds properly for Rajasthan facility expansion.
A
Amit S.
Revenue up but profits down - classic case of costs eating into margins. Electrical sector is competitive with Chinese imports. Unless they show strong future plans, retail investors might get burned. SEBI should scrutinize such IPOs more carefully. #InvestorBeware
S
Sunita R.
Positive that they're investing in Rajasthan infrastructure (₹120cr capex). We need more manufacturing hubs beyond Gujarat/Maharashtra. But wish they'd disclose more about their client base and order pipeline. IPO prospectus seems a bit light on future growth drivers.
V
Vikram J.
₹450cr IPO with single book runner (Systematix)? That's unusual for this size. Either they got great terms or couldn't attract bigger names. Also, no OFS means promoters aren't cashing out - good sign! Will track grey market premiums before applying. 👍

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