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Mangalam Global RI (NSE) review (Avoid)

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•    MGEL is engaged in the manufacturing/trading in edible oil, cotton, agri products. 
•    For the last two fiscals, it marked growth in its top and bottom lines. 
•    The counter is well managed and being kept above the RI price to lure investors.
•    The RI is aggressively priced considering its market movements.
•    There is no harm in skipping this pricey bet. 

The Company has raised funds through Initial Public Offering (IPO) and was listed on the NSE -Emerge on November 27, 2019. The overall issue size proposed was at approx. Rs 21.57 Crores. The overall issue size was 42,30,000 Equity shares @ Rs 51.00 per share of Rs. 10 each. The Company was migrated to NSE main board on 23rd December 2020. Thus, the Company is presently listed on NSE main board. Pantomath Capital Advisors Pvt. Ltd. had the mandate for maiden IPO, while this RI is being self-managed by the company under the advisory of Beeline Capital Advisors Pvt. Ltd. 

Mangalam Global Enterprises Ltd. (MGEL) is mainly engaged into Manufacturing, trading and import of Edible Oil/ Non-edible oil and Agricultural Products i.e. Soya Oil, Soya Meal, Soya De Oiled Cake, Mustard Oil, Mustard Meal, Mustard De Oiled Cake, Refined Soyabean Oil, Refined Vegetable Oil, Pungent Mustard Oil, Refined FSG), Castor De-Oiled Cake and High Protein Castor De-Oiled Cake, Cotton Bales, Cotton Cake Cattle Feed, Cotton Wash Oil, processing of wheat and rice. 

Also, the Company is engaged in Trading including domestic and export of Agricultural Products i.e. Wheat, Rice etc. Furthermore, the Company has started its Commercial Operations/production by manufacturing the Agri products i.e. Singapore) Pte Ltd. The subsidiary is primarily involved in trade of variety of goods without a dominant of product. In August 2021, the Company had purchased the Bavla Plant for processing of Wheat and Rice having installed capacity of 150 MT & 125 MT per day respectively. 

MGEL has marked its presence in both domestic as well as global markets. It supplies products in states such as Gujarat, Rajasthan, Delhi, Maharashtra, and West Bengal. In order to capture growing demand for Castor Oil in international market and to create a more responsive and cost-effective supply chain, it exports products to countries such as China, Thailand, France, Belgium, Oman, Netherland, Mexico and Turkey. The Company is falling under category of 2 Star Export House. As on December 31, 2023 we have 58 employees on payroll and engages contract labourers as and when required.

Mangalam Global Enterprise Ltd. (MGEL) is coming out with its Rights Issue (RI) of 20600000 equity share of Rs. 2 each at a fixed price of Rs. 20 per share to mobilize Rs. 41.20 cr. The RI opens for subscription on June 03, 2024, and will close on June 12, 2024. The company is offering RI in the ratio of 1 shares for every 7 shares held by the eligible stakeholders as of the record date of May 14, 2024. The full amount is to be paid on application for the number of shares applied. Post allotment, shares will be listed on NSE. The company is spending Rs. 0.70 cr. for this RI process, and from the net proceeds, it will utilize Rs. 36.30 cr. for working capital, and Rs. 4.20 cr. for general corporate purposes.

The issue is self-managed by the company itself, and Link Intime India Pvt. Ltd. is the registrar to the issue. Beeline Capital Advisors Pvt. Ltd. is the advisor to the issue. 

Post-RI, company's current paid-up equity capital of Rs. 28.84 cr. will stand enhanced to Rs. 32.96 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 329.56 cr. 

As per the exchange filing, for the last two fiscals, the company has (on a consolidated basis) posted a total income/net profit of Rs. 646.55 cr. / Rs. 17.58 cr. (FY23), and Rs. 822.47 cr. / Rs. 22.98 cr. As of March 31, 2024, its current paid-up equity capital of Rs. 26.00 cr. is supported by free reserves of Rs. 154+ cr. 

The company paid a dividend of 10% in September 2021, as well in July 2022, and Re. 1% in August 2023. It will adopt a prudent dividend policy post listings of RI shares based on its financial performance and future prospects. 

The scrip last closed on cum-right basis at Rs. 21.90 on May 13, 2024, and opened on an ex-right basis at Rs. 22.15 on May 14, 2024. Since then, it has marked a high/low of Rs. 24.00 / Rs. 20.40. The scrip last closed at Rs. 20.75 as of May 31, 2024. For the last 52 weeks' it has posted a high/low of Rs. 26.14/ Rs. 12.52. 

The promoters' holding has been constant at 74.99% for the last three quarters ended with March 31, 2024. The counter is well managed above the RI price to lure investors. 

Conclusion / Investment Strategy

The company is engaged in manufacturing /trading in edible oil, cotton, castor oil and agri products. The market price movement has been geared to get fancy valuation for the RI, which appears aggressively priced. The company marked growth in its top and bottom lines for FY23 and FY24, its market price movement has been stagnant and well maintained above the RI price. There is no harm in skipping this pricey bet.

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on June 2, 2024

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

(Dilip Davda -SEBI registered Research Analyst-Mumbai,

Registration no. INH000003127 (Perpetual)

Email id: ).

More Mangalam Global Enterprise Limited RI Views / Analysis / Recommendations ...

The Mangalam Global Enterprise Rights Issue 2024 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered Rights Issue Analysts tells you if Mangalam Global Enterprise Rights Issue 2024 worth investing. The Mangalam Global Enterprise Rights Issue 2024 Note sets the Rights Issue expectations in systematic way which tells you if Mangalam Global Enterprise Rights Issue 2024 good to buy (good or bad / yes or no). The Rights Issue Forecast tells you weather to invest in Mangalam Global Enterprise Rights Issue 2024 by providing Rights Issue recommendations i.e. subscribe, avoid and neutral.


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