Mangal Electrical Industries Ltd shares tumbled nearly 5% on their market debut, closing below their issue price. The IPO was oversubscribed 9.46 times, raising Rs 400 crore. Funds will reduce debt and expand operations in Rajasthan. The company exports transformer components to various countries.

Mangal Electrical Industries: A Lukewarm Market Debut

Mangal Electrical Industries: A Tepid Market Debut

Mangal Electrical Industries Ltd (MEIL) experienced a less-than-stellar market entry on Thursday, its shares dipping nearly 5% below the IPO price of Rs 561. The stock closed the day at Rs 533.95 on the BSE, a somewhat disappointing outcome considering the IPO's impressive 9.46 times oversubscription.

The Rajasthan-based transformer component manufacturer saw its shares initially list at Rs 558 on the BSE, a slight decrease from the issue price. Trading throughout the day remained weak, with the price plummeting to a low of Rs 527.30 before settling at the final closing price. A similar trend was observed on the NSE, where the stock opened at Rs 556 and concluded the day at Rs 535.35 – a 4.57% drop.

Despite the underwhelming market debut, the Rs 400 crore IPO, comprised entirely of fresh issuance, attracted significant investor interest.

Debt Reduction: A significant portion of the proceeds will be allocated to reducing the company's debt burden.
Expansion Plans: Funds will also be used to expand MEIL's manufacturing facilities in Rajasthan.
Working Capital Boost: Strengthening the company's working capital is another key objective.

It's worth noting that Mangal Electrical Industries is a recognized exporter of transformer components, supplying numerous international markets. The company's future performance will be closely watched to see if it can overcome this initial market hesitancy.