Mangal Electrical Industries IPO: Check details here

20 Aug 2025 , 04:52 PM

Mangal Electrical Industries Limited is a domestic manufacturer of transformers and components. It specialises in CRGO coils, laminations, amorphous cores, and transformers up to 10 MVA. Its IPO is aimed at strengthening its balance sheet, funding working capital requirements, and funding capacity expansion.

Offer Details of the IPO

·         Total Offer size: Up to INR 4,000 million

·         Fresh Issue: Up to INR 4,000 million

There is no offer for sale as part of this IPO

Price Band: Rs. 533 to Rs. 561 per Equity Share.

Book Running Lead Managers (BRLMs):

• Systematix Corporate Services Limited.

Objectives of the IPO

·         De-leveraging/Repayment of Debt: Repayment/prepayment, in full or in part, of certain outstanding borrowings availed by the company: INR 1,013 million

·         Capital Expenditures: Civil works of the company for expanding the facility at Unit IV situated in Rajasthan: INR 879 million

·        Working capital requirements: To the tune of INR 1,220 million

Indian Transformer Industry: An Overview

The Indian transformer industry is a vital part of the country’s power sector, enabling efficient transmission and distribution of electricity. The industry serves a wide range of end customers, including power generation companies, transmission and distribution utilities, industrial establishments, and commercial organizations. The products and services offered include power transformers, distribution transformers, and specialized transformers such as furnace, rectifier, and traction transformers, along with services like repair and maintenance, testing and commissioning, and consultancy for transformer selection and installation.

The Indian transformer industry can be broadly segmented into three key categories: Power Transformers, Distribution Transformers, and Specialized Transformers.

Power Transformers: This segment involves transformers used in high-voltage transmission networks for step-up and step-down applications. They are designed to handle large voltage and current levels and are commonly deployed in power generation and transmission systems.

Distribution Transformers: This segment covers transformers that operate at lower voltages to step down power from transmission points to distribution points. They are widely used in distribution networks, industries, and commercial establishments.

Specialized Transformers: This segment includes transformers designed for specific applications such as furnace, rectifier, and traction transformers. These are mainly used in industries like steel, cement, and railways, where unique power requirements need to be addressed.

Industry Size and Growth Trends

The Indian transformers industry has witnessed significant growth in recent years, driven by increasing demand for electricity, government initiatives, and advancements in technology. As of FY 2025, the market size is estimated to be INR 353.9 billion, with a projected growth rate of 8.1% CAGR from FY 2025 to FY 2030. By FY 2030, the market is expected to reach a size of INR 522.98 billion.

The growth of the Indian transformer industry can be segmented into two main categories: power transformers and distribution transformers.

• Power Transformers: This segment is expected to grow at a CAGR of 7.5% from FY 2025 to FY 2030. Growth is being driven by the rising demand for high-voltage transmission lines and substations to support expanding power generation and transmission networks.
• Distribution Transformers: This segment is expected to grow at a CAGR of 8.5% during the same period. Growth is supported by the increasing requirement for low-voltage distribution transformers in both urban and rural areas, driven by electrification and infrastructure expansion initiatives.

The following are the key growth drivers:

• Increasing Electricity Demand: Rapid population growth, urbanization, and industrialization have significantly raised electricity consumption, driving the need for more transformers across transmission and distribution networks.
• Government Initiatives: Policies aimed at strengthening power infrastructure, enhancing energy efficiency, and supporting renewable energy adoption are creating a favorable environment for industry growth.
• Technological Advancements: The introduction of compact, energy-efficient designs and the use of advanced materials are improving transformer performance, reliability, and lifespan, boosting demand.
• Renewable Energy Expansion: The rising share of solar and wind power in India’s energy mix requires transformers for smooth grid integration, creating additional opportunities for the industry.

 

 

Mangal Electrical Industries Limited – An overview

Mangal Electrical Industries Limited, formerly known as Mangal Electrical Industries Private Limited, was originally established as a partnership firm in 1989. The company transitioned to a private limited company on April 1, 2008 and was subsequently converted into a public limited entity on July 25, 2024.

The company’s founders, Rahul Mangal and Ashish Mangal, have over 35 years of experience in the power infrastructure industry. Rahul Mangal, the Chairman and Managing Director, has been instrumental in expanding the company’s reach domestically and internationally. Aniketa Mangal, another key promoter, has been associated with the company since 2016 and has played a significant role in evolving the business from manufacturing transformers to processing transformer components and streamlining business processes.

Operating Segments

Mangal Electrical Industries Limited specializes in processing transformer components, including laminations, CRGO slit coils, amorphous cores, coil and core assemblies, wound and toroidal cores, and oil-immersed circuit breakers. The company also trades CRGO and CRNO coils as well as amorphous ribbons. It manufactures transformers ranging from single-phase 5 KVA to three-phase 10 MVA units and provides EPC services for electrical substations, catering to the power infrastructure sector.

The company’s product and service portfolio includes:

• Transformer components (CRGO wide coils, slit coils, cut laminations, amorphous cores, coil and core assemblies, wound and toroidal cores)
• Oil-immersed circuit breakers
• Transformers (single-phase 5 KVA to three-phase 10 MVA units)
• EPC services for electrical substations
• Custom manufacturing, R&D, and quality assurance/testing

The company has also developed strong partnerships and associations within the power sector, working with organizations such as:

• PGCIL (Power Grid Corporation of India Limited): Approved vendor for processing transformers/reactors up to 765 kV class.
• NTPC: Supplier of transformer components and solutions for power generation projects.
• State Electricity Boards: Long-term partner for supplying distribution transformers and components across multiple states in India.
• Private Infrastructure Developers: Collaborates on EPC projects for industrial and commercial power distribution.

 

Competitive Landscape

The Indian transformer component industry is characterized by a mix of organized and unorganized players, with varying levels of market fragmentation. While there are a few large, organized players with significant market share, the industry is still relatively fragmented, with numerous smaller, unorganized players operating in the market. The major competitors in this space include:

• Jay Bee Laminations: Established in 1988, Jay Bee Laminations Limited is a prominent manufacturer of CRGO silicon steel cores for India’s power and distribution transformer industry.
• Vilas Transcore: Vilas Transcore Limited has earned a strong position in the CRGO processing industry, with over 27 years of expertise in transformer lamination, toroidal cores, and CRGO slitted coils.
• KRYFS Power Components: KRYFS Power Components Ltd. is one of the leading transformer core manufacturers in India, with an annual capacity to convert 50,000 MT of CRGO electrical steel into transformer components.
• NLMK Group: NLMK Group is a globally recognized steel manufacturer with a vertically integrated business model, spanning mining and steelmaking in cost-efficient regions.
• Vardhman Stampings: Vardhman Stampings Pvt Ltd (VSPL) is one of the fastest-growing players in the CRGO sector, operating a state-of-the-art facility with a production capacity of over 30,000 MT per annum.

Competitive Positioning

• Expertise in CRGO products: The company has deep expertise in manufacturing and processing CRGO products, which are critical for transformer performance.
• Advanced manufacturing facilities: State-of-the-art infrastructure enables the company to deliver precision-engineered transformer components.
• Strong customer relationships: Long-standing partnerships with public sector utilities and private developers strengthen its market position.

Strengths

• Experienced Promoters and Management: The company is led by Chairman and Managing Director Rahul Mangal, who has over 35 years of industry expertise. Along with a skilled management team, this experience helps the company effectively navigate industry challenges and drive strategic growth.
• Strong Backward and Forward Integration: With in-house capabilities for procuring and processing critical raw materials like CRGO, Amorphous, and ICB, the company ensures consistent quality, better cost control, and reduced reliance on external suppliers, strengthening its competitive positioning.
• Proven Track Record: The company has consistently delivered strong financial performance, achieving a revenue CAGR of 30.39% between FY 2020 and FY 2024, showcasing its ability to capture industry opportunities and expand its market presence.

Weaknesses

• Revenue Concentration: Around 71% of revenue comes from Gujarat, Rajasthan, and Uttar Pradesh. Such dependence on limited geographies exposes the company to regional slowdowns, policy shifts, or local disruptions, making diversification essential for long-term stability.
• Raw Material Availability and Vendor Dependence: The business relies heavily on CRGO steel coils, sourced domestically and through imports. Dependence on a small group of suppliers increases risks related to price fluctuations, supply delays, and quality issues, which can directly affect production timelines and margins.
• Lower Contribution from Transformer Manufacturing: Transformer manufacturing contributes only about 23% of revenue, while the majority comes from processing components. This restricts the company from fully capturing growth opportunities in the transformer demand surge and may limit brand visibility in end-to-end solutions.
• Higher working capital days: Over the past three years, Mangal registered higher working capital days than its peers (130-150 vs 70-100).

Financial Profile

Robust Revenue Growth: The company witnessed a strong revenue CAGR of 24% over the past two years. The strong growth was due to both volume and pricing growth in its transformer components business and a shift in mix towards higher capacity transformers.

Strong margin expansion: Profitability has outpaced revenue growth over a two year period. While margins decreased in FY24, they improved strongly in FY25. Part of the margin improvement in FY25 was due to low cost inventory as steel prices increased. In addition, the company’s capacity utilization across its transformers and transformer components businesses improved.

 

Table 1: Peer Comparison – Financials

Company	Particulars  (INR Lakhs)	FY23	FY24	FY25	CAGR
Mangal Electrical Industries Limited	Revenue From Operations	35430.8	44948.4	54942.1	24%
	EBITDA	4442.47	4262.51	8184.09	36%
	EBITDA Margin (in %)	12.54%	9.48%	14.90%
	PAT	2473.81	2094.86	4730.70	38%
	PAT Margin (in %)	6.98%	4.66%	8.61%
	Return on Net Worth (in %)	30.32%	20.05%	34.14%
	Return on Capital Employed (in %)	23.24%	19.92%	25.38%
	Debt – Equity Ratio (in times)	1.03	0.80	0.92
	Day Working Capital	147	120	131
Vilas Transcore Limited	Revenue From Operations	28260.5	30974	35305.1	12%
	EBITDA	2931.09	3038.35	4455.17	23%
	EBITDA Margin (in %)	10.37%	9.81%	12.62%
	PAT	2021.11	2307.5	3417.06	30%
	PAT Margin (in %)	7.15%	7.45%	9.68%
	Return on Net Worth (in %)	15.89%	15.57%	15.27%
	Return on Capital Employed (in %)	20.56%	20.23%	17.03%
	Debt – Equity Ratio (in times)	0.04	0.00	0.04
	Day Working Capital	77	74	91
Jay Bee Lamination Limited	Revenue From Operations	24669.2	30291.2	36745.4	22%
	EBITDA	2370.3	3158.28	4299.17	35%
	EBITDA Margin (in %)	9.61%	10.43%	11.70%
	PAT	1296.7	1935.27	2538.62	40.00%
	PAT Margin (in %)	5.26%	6.39%	6.91%
	Return on Net Worth (in %)	34.93%	36.32%	24.11%
	Return on Capital Employed (in %)	31.38 %	35.49%	24.26%
	Debt – Equity Ratio (in times)	0.72	0.38	0.16
	Day Working Capital	78	75	99

Source: RHP

Table 2: Peer Comparison – Valuations

Name of Company	P/E	EPS (INR) Diluted	RoNW (%)	Total income (INR in lakhs)	Closing price as on August 12, 2025
Mangal Electrical Industries Limited	24.31	23.08	34.14	55139.04	561*
Vilas Transcore Limited	36.48	14.58	15.27	36199.76	531.9
Jay Bee Lamination Limited	18.28	12.31	24.11	36837.67	225.05

Source: RHP; * – upper end of price band