10 lakh shares to unlock in this Sunil Singhania-backed stock on Monday. Smallcap down 24% from IPO price

The shareholder lock-in of Mangal Electrical Industries is likely to be lifted on Monday, November 24 and as per Nuvama’s estimates, nearly 10 lakh shares, accounting for 4% of the total outstanding shares, will hit the market.Although the shares are eligible for sale, the responsibility lies with the investors as to whether or not to sell them.

Mangal Electrical Industries, which manufactures and supplies crucial components for transformers used in transmission and distribution of electricity, had a forgettable market debut as its shares were listed at a discount of almost 1% to the issue price of Rs 561. On the BSE, the shares were listed at 558, while on the NSE at Rs 556.The story has not changed since the listing on August 25. The share has fallen by 24% compared to the IPO price to 427.05.

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Major investors

The company raised Rs 120 crore from 10 anchor allocations, including names like Abakkus Diversified Alpha Fund, backed by Abakkus Asset Manager founder Sunil Singhania. About 31.7% of the anchor portion was allocated to the fund at the highest price band of Rs 561. Societe Generale was the other major investor in the issue. Mangal Electrical Industries reported a 7% decline in the company’s net profit in the September quarter at Rs 13 crore versus Rs 14 crore in the year-ago period. Total revenue stood at Rs 156 crore in the quarter under review, up 17% from Rs 133 crore reported in the year-ago period. Brokerage SBI Securities had recommended a ‘Subscribe’ view on the issue with a long-term view.

“The products such as CRGO (Cold Rolled Gran Oriented) laminates, amorphous cores, ICBs (Immersed Circuit Breaker) and coils are part of small transformers, distribution transformers or large transformers and generators. The company’s wide product range – from CRGO laminations and amorphous cores to transformers and EPC services – makes it a one-stop supplier in the transformer value chain,” the broker’s note said.

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