The Mangal Compusolution IPO is gaining attention as it approaches its bidding dates. If you’re an investor looking to diversify your portfolio with an SME IPO, this post will provide an in-depth review of the company’s performance, strengths, risks, and financials to help you make an informed decision.
Mangal Compusolution IPO Details
| IPO Dates | Price Range | Lot Size | Minimum Investment | Issue Size |
|---|---|---|---|---|
| 12 Nov 2024 – 14 Nov 2024 | ₹45 per share | 3,000 shares | ₹1,35,000 | ₹16.23 Cr |
- IPO Type: Fixed Price Issue
- Listing Platform: BSE SME
- Face Value: ₹10 per share
- Total Shares Issued: 3,606,000 shares
- Market Maker Portion: 186,000 shares
- Listing Date: November 20, 2024
Also See: IPO GMP
About Mangal Compusolution Limited
Mangal Compusolution Limited (MCSL), founded in 2011, specializes in leasing and selling customized IT solutions. The company provides a range of hardware, including computers, servers, and network components, along with software solutions tailored to meet business needs. MCSL’s services extend to maintenance and support through annual maintenance contracts (AMC), catering primarily to the Maharashtra region but serving clients across India.
- Managing Director: Mr. Pathik Mukesh Desai
- Parent Organization: Mangal Compusolution Limited
Strengths of Mangal Compusolution
- Diverse IT Offerings: Mangal Compusolution provides a wide selection of IT hardware from top brands such as IBM, Dell, HP, Lenovo, Sony, Apple, and Toshiba, catering to both rental and purchase requirements.
- Customer Continuity Assurance: The company offers standby equipment to ensure seamless business operations for clients, enhancing customer satisfaction.
- Revenue Growth: The company has shown consistent growth in revenue from ₹17.21 Cr in FY22 to ₹20.88 Cr in FY24.
- Strong Client Base: Mangal Compusolution has a diversified portfolio of clients across various industries, including financial services, healthcare, and media.
Risks Associated with Mangal Compusolution
- Client Concentration: The top 10 clients contribute a significant portion of the company’s revenue. Any loss of a major client could negatively impact financial performance.
- Legal and Regulatory Challenges: Ongoing legal disputes and regulatory actions could affect the company’s reputation and financial health.
- High Financial Indebtedness: As of June 30, 2024, the company had an outstanding debt of ₹18.63 Cr. Failure to manage this debt could hamper operations.
- Regional Revenue Dependence: A substantial portion of the revenue comes from clients in Maharashtra. Adverse changes in this region could impact business.
- Dependence on a Single Lender: The company relies heavily on Bharat Co-Operative Bank (Mumbai) Ltd for credit. Any disruption in this relationship could pose financial risks.
Also See: Subscription
Mangal Compusolution Financial Performance
| Year | Revenue (₹ Cr) | Total Assets (₹ Cr) | Profit (₹ Cr) |
|---|---|---|---|
| FY22 | 17.21 | 52.67 | 0.87 |
| FY23 | 17.48 | 47.16 | 7.04 |
| FY24 | 20.88 | 45.52 | 3.86 |
Mangal Compusolution IPO Lot Size and Investment Details
Investors can bid for a minimum of 3,000 shares:
| Investor Type | Lots | Shares | Investment Amount |
|---|---|---|---|
| Retail (Min) | 1 | 3,000 | ₹1,35,000 |
| Retail (Max) | 1 | 3,000 | ₹1,35,000 |
| HNI (Min) | 2 | 6,000 | ₹2,70,000 |
Promoter Holding
- Pre-Issue Shareholding: 100.00%
- Post-Issue Shareholding: 73.50%
Promoters include Hardik Meghraj Jain, Neeta Mukesh Desai, Pathik Mukesh Desai, Mukesh Khandubhai Desai, and Binny Pathik.
Key Performance Indicators
| Metric | Value |
|---|---|
| Market Capitalization | ₹61.23 Cr |
| ROE | 3.97% |
| ROCE | 2.05% |
| Debt/Equity Ratio | 0.9 |
| RoNW | 15.56% |
| P/BV | 2.16 |
| PAT Margin | 19.82% |
Objects of the Issue
The company plans to utilize the IPO proceeds for:
- Capital Expenditure: Enhancing business capacity and technological infrastructure.
- General Corporate Purposes: Meeting operational costs and improving financial stability.
Mangal Compusolution IPO Review by Dilip Davda
Dilip Davda’s Opinion: Avoid
According to market analyst Dilip Davda, Mangal Compusolution operates in a highly competitive and fragmented IT services sector. Despite showing growth in revenue, its bottom line remains inconsistent. The IPO is priced fully based on annualized earnings, offering a “High Risk/Low Return” scenario. Investors might want to avoid this IPO unless they have a high-risk appetite and a long-term investment perspective.
Conclusion
The Mangal Compusolution IPO is an opportunity for investors looking to explore the IT hardware solutions market. However, the company faces significant risks related to client concentration, legal disputes, and financial indebtedness. The IPO is fully priced, and while the business shows potential, the high competition and regional concentration could pose challenges. Investors are advised to carefully evaluate their risk tolerance before applying.
For IPO-related queries, contact:
- Registrar: Kfin Technologies Limited
- Phone: 04067162222, 04079611000
- Email: mangalcomp.ipo@kfintech.com
- Website: Kfintech IPO Status
Invest wisely and stay informed!
FAQs
What are the Mangal Compusolution IPO dates?
The IPO will open for bidding from November 12, 2024, to November 14, 2024.
What is the price of Mangal Compusolution IPO shares?
The fixed price for the IPO is ₹45 per share.
What is the minimum investment required for Mangal Compusolution IPO?
The minimum investment required is ₹1,35,000 for one lot (3,000 shares).
Where will Mangal Compusolution IPO be listed?
The IPO will be listed on the BSE SME exchange.
What is the total issue size of the Mangal Compusolution IPO?
The total issue size is ₹16.23 crore.
Who are the promoters of Mangal Compusolution Limited?
The promoters include Hardik Meghraj Jain, Neeta Mukesh Desai, Pathik Mukesh Desai, Mukesh Khandubhai Desai, and Binny Pathik.
How will the IPO funds be utilized?
The funds will be used for capital expenditure and general corporate purposes.
Is Mangal Compusolution IPO a good buy?
The IPO is considered fully priced with moderate growth potential but comes with risks such as client concentration and financial indebtedness. Investors should evaluate their risk appetite before applying.
What is the market capitalization of Mangal Compusolution post-IPO?
The market capitalization post-IPO is estimated to be ₹61.23 crore.
Who is the registrar for the Mangal Compusolution IPO?
Kfin Technologies Limited is the registrar for this IPO.
Can retail investors apply for more than one lot?
No, retail investors can only apply for a maximum of one lot (3,000 shares).
What are the risks associated with investing in Mangal Compusolution IPO?
Key risks include client concentration, high financial debt, legal disputes, and regional revenue dependence.
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