IPO Snapshot : Mangal Electrical Industries Ltd

Background & Operations:

Mangal Electrical Industries Limited (MEIL) specializes in processing a wide range of transformer components including transformer laminations, CRGO slit coils, amorphous cores, coil and core assemblies, wound and toroidal cores, and oilimmersed circuit breakers. It also trades in CRGO and CRNO coils, as well as amorphous ribbons, and manufactures transformers ranging from single-phase 5 KVA to three-phase 10 MVA units, along with customized products for the power infrastructure industry.

Under the brand name ‘Mangal Electrical,’ which enjoys strong reputation and brand recall, The Company also provides EPC services for setting up electrical substations, primarily serving the power sector. The Company operates five production facilities in Rajasthan, with annual capacities of 16,200 MT for CRGO, 10,22,500 KVA for transformers, 75,000 units for oilimmersed circuit breakers (ICB), and 2,400 MT for amorphous units. Plans are underway to expand the Unit IV facility. It complies with rigorous quality standards, being NABL and PGCIL lab-approved, and holds PGCIL approval for processing transformers/reactors from 132 kV up to 400 kV classes. It is also ISO 9001:2015 and ISO 14001:2015 certified, with NTPC approval for CRGO processing. Investment in advanced German Brockhaus Messtechnik machinery enhances process and quality control, enabling high-efficiency output. Its customer base spans government and municipal utilities such as Ajmer Vidyut Vitran Nigam Limited and Jaipur Vidyut Vitran Nigam Limited, as well as private energy producers like Voltamp Transformers Limited and Western Electrotrans Private Limited. The Company serves clients across India and has exported transformer components to the Netherlands, UAE, Oman, the USA, Italy, and Nepal over the last three fiscal years (2023-2025).

As of June 30, 2025, MEIL’s robust order book stood at ₹29,419.78 lakhs, reflecting estimated revenues from unexecuted portions of existing contracts. This order book is based on aggregate contract values net of completed work, though it excludes potential scope changes or cost escalations. Its EPC services are focused on government and public sector undertakings, with a proven track record of four successfully completed turnkey projects handed over to utilities, underscoring expertise in Indian power infrastructure solutions. A strategic shift toward producing higher-capacity transformers, particularly multiple orders for 10 MVA (10,000 kVA) units secured during Fiscal 2024, has contributed to revenue growth. While manufacturing a 10 MVA transformer takes 10–15 days, much longer than the 3–5 days for a 10 KVA unit, the transition to larger units resulted in increased production value despite stable production cycle counts. This shift accounts for the revenue surge in Fiscal 2024 compared to other years, driven by the execution and delivery of these high-capacity units.

Overall, The Company maintains strong production capabilities and adherence to quality standards, supported by advanced technology, a diverse and reputable client base, a well-filled order book, and demonstrated expertise in transformer manufacturing and power infrastructure solutions, positioning itself as a key player in the Indian power sector under the trusted ‘Mangal Electrical’ brand. On the financial performance front, for the last three fiscals, The Company has posted a total income/net profit, of Rs. 357.81 cr. / Rs. 24.74 cr. (FY23), Rs. 452.13 cr. / Rs. 20.95 cr. (FY24), and Rs. 551.39 cr. / Rs. 47.31 cr. (FY25). The Company marked growth in its top lines for the reported periods, but posted a setback in bottom lines for FY24.

Objects of Issue:

MEIL proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects:

• Repayment/prepayment, in full or in part, of certain outstanding borrowings availed by The Company; · Capital expenditure including civil works of MEIL for expanding the facility at Unit IV situated at Reengus Sikar District, Rajasthan to optimize space usage and increase storage capacity;
• Funding working capital requirements of The Company; and
• General corporate purposes

Competitive Strengths

• Promoters exhibit strong leadership and are supported by experienced senior management
• Exhibition of certain approvals available to selected market players
• Diversified base of customers
• Strong backward and forward integration which ensures operational efficiency
• Strong backward and forward integration which ensures operational efficiency

Business Strategy:

• Expand manufacturing capacity at existing facilities
• Enhancement of capacity by qualifying for 765 kV class approval issued by PGCIL
• Establishing collaboration with CRGO mill suppliers
• Expanding existing product portfolios
• Grow customer base by diversifying into new geographies and maintain relationships with its key customers and other stakeholder

Key Concerns

• The costs of the raw materials that MEIL uses in its manufacturing process are subject to volatility due to factors beyond control. Increases or fluctuations in raw material prices may have a material adverse effect on the business, financial condition, results of operations and cash flows.
• Heavily dependent on the performance of the CRGO products and transformer product component. Any adverse changes in the conditions affecting the CRGO products and transformer products market can adversely impact the business, financial condition, results of operations, cash flows and prospects.
• Any disruption, breakdown or shutdown of manufacturing facilities or original equipment manufacturer suppliers may have a material adverse effect on the business, financial condition, results of operations and cash flows.
• MEIL does not have any direct hedging policy in place for mitigating raw material price fluctuations, particularly for CRGO and CRNO coils, which may adversely impact the business, financial condition, results of operations, and cash flows.
• The Company’s dependence on limited customers and any change in customer composition may adversely impact the business, financial condition, results of operations, and cash flows.
• Depend significantly on contract labor and an inability to access contract labor at reasonable costs at its project sites may adversely affect the business.
• MEIL is subject to raw material price volatility, foreign exchange fluctuations which could adversely impact the business, results of operations, cash flows and financial condition.
• It does not have definitive agreements for supply of products or raw material with its customers or suppliers. Failure to successfully leverage its supplier/customer relationships and network could adversely affect MEIL.
• Failure to protect and enforce intellectual property rights, including trademarks and brand identity, could adversely impact the business, financial condition, and competitive position.
• Depend on third parties for the supply of its raw materials and delivery of products and such third parties could fail to meet their obligations, which may have a material adverse effect on the business, results of operations, financial condition and cash flows

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Source: HDFC Securities Prime Research