Mangalam Alloys Limited

As per financial performance, Mangalam Alloys Limited has posted total income / net profits of Rs 271.90 Cr / Rs (6.53) Cr (FY21), Rs 309.73 Cr / Rs 5.05 Cr (FY22) and Rs 308.17 Cr / Rs 10.13 Cr (FY23), So company has shown average results, but sudden rise in bottom-line before IPO is very surprising. Also trade receivables are around 29% of FY23 total revenue. Company has posted an average EPS of Rs 3.05/- and average RoNW of 13.70% for last three fiscals. Issue is priced at a P/BV of 1.54 as per NAV of Rs 51.87/- as on Post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 39.11 and as per FY23 earnings P/E is 19.49. As per RHP, comparison between peers is shown in above table. On BRLM's  front, Expert Global Consultants Private Limited is associated with this SME IPO and handled 4 SME IPOs in last 3 years. From last 4 IPOs, one opened below issue price and remaining opened at par or above issue price on the listing day. As of now from last 4 IPOs, one is trading below issue price and remaining are trading above issue price. ( As on 18.09.23 ) As per financials, Mangalam Alloys Limited has shown good results, RoNW is 13.70% and P/E is respectively 39.11 and 19.49 as per FY22 and FY23 earnings. As per FY22 earnings issue looks aggressively priced and as per FY23 earnings issue looks fully priced. Also sudden rise in net profit, higher value of trade receivables and higher issue expenses are very surprising. Company is in business of manufacturing of stainless-steel-based products, which is highly fragmented and competitive segment. Performance of BRLM is average. Based on financials and other data we are giving NEUTRAL rating, but as per gray market activity, we are giving SUBSCRIBE rating for listing gains to this SME IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1  Mr. Uttamchand Chandanmal Mehta
• 2  Mr. Tushar Uttamchand Mehta
• 3  Meghjyoti Impex Private Limited