Mangalam Global RI (NSE) review - (Avoid)

•    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. 

PREFACE:
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. 

ABOUT COMPANY:
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.

ISSUE DETAILS:
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. 

FINANCIAL PERFORMANCE:
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. 

DIVIDEND POLICY:
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. 

SCRIP PERFORMANCE: BASED ON NSE WEBSITE DATA: SCRIP CODE: MGEL (FV Rs. 2).
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.