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Mandeep Auto Industries Limited IPO Review



Mandeep Auto Industries Limited IPO Review


Mandeep Auto Industries Limited (MAIL) is a testament to the power of innovation and precision in the automotive and industrial component manufacturing sector. Founded in the year 2000, MAIL has established itself as a leading manufacturer, known for its high performance and efficiency in the realm of automotive parts production.


The company's origins trace back to the bustling industrial city of Faridabad, Haryana, India. It was here that the visionary promoter family, led by Gurpal Singh Bedi, embarked on a journey to create a company that would stand at the forefront of manufacturing technology. With over 25 years of experience, Gurpal Singh Bedi, as the Managing Director, has steered the company towards a path of relentless growth and innovation.


The inception of MAIL was driven by a desire to fill a gap in the market for precision-focused steel metal manufacturing. The company was born out of a commitment to provide unmatched quality and service, ensuring that the needs of the automotive industry were met with the highest standards of excellence. This dedication to quality is reflected in their ISO 9001:2015 certified facilities, where a team of proficient experts oversees the production of top-quality press and machining components.


MAIL's journey has been marked by significant milestones, such as the incorporation of Automatic Gear Hobbling and CNC systems between 2010 and 2015, which enhanced the company's capabilities and set new standards in manufacturing precision. The company's vision to lead, shape, and transform the future of mobility is backed by a mission to exceed customer expectations and inspire the industry with advancements in technology and integrity.


Today, Mandeep Auto Industries Limited continues to drive solutions with an exceptional approach, adapting to new technologies and optimizing manufacturing investments to deliver solutions that align perfectly with the evolving needs of businesses. Their commitment to empowering success through dedication and quality service remains the cornerstone of their operations, as they pave the way for a future where precision and innovation define excellence in the automotive industry.



Competitive Strengths


Mandeep Auto Industries, a prominent name in the auto component manufacturing sector, has carved a niche for itself through a combination of strategic initiatives and inherent strengths. Here's an in-depth look at the competitive advantages that position Mandeep Auto Industries as a leader in its field.


Revenue, Sales, and Profit



Mandeep Auto Industries Limited, incorporated in 2000, has shown a significant growth trajectory over the years. For the financial year ending March 31, 2023, the company reported a revenue increase of 36.03% and a profit after tax (PAT) increase of 62.17% compared to the previous year. Specifically, the revenue rose to ₹2,978.74 lakhs from ₹2,189.73 lakhs, while the PAT surged to ₹104.91 lakhs from ₹64.69 lakhs. As of August 31, 2023, the company achieved a revenue of ₹510.27 lakhs with a net profit of ₹55.89 lakhs. These figures reflect the company's robust performance in the manufacturing and supply of various products like sheet metal components, auto parts, sprocket gears, and machined components. The company's consistent growth is also evident from the steady rise in total income over the years, from ₹15.63 crore in FY21 to ₹21.89 crore in FY22, and further to ₹29.08 crore in FY23. This growth pattern underscores Mandeep Auto Industries' strong position in the OEM segment and its successful expansion strategies.


Distribution Network and Geographical Reach


In terms of distribution, Mandeep Auto Industries has a robust network that ensures the delivery of top-quality press and machining components. They have a strong customer base in India and are known for their personalized services and high degree of precision in both quality and timing. The company's geographical reach extends across various regions, facilitated by its state-of-the-art infrastructure and sophisticated technology. This includes advanced processing plants and a talent pool that drives innovation, supported by world-class marketing and distribution expertise. The company's growth strategy includes a focus on expanding its product portfolio by developing new designs and consistently adapting to new manufacturing technologies. This approach has enabled Mandeep Auto Industries to maintain a longstanding relationship with their clients, with the majority of their business coming from repeat customers.


Unique Features


The company is recognized for its ISO 9001:2015 certified facilities, which underscore its dedication to producing top-quality press and machining components. A key feature that distinguishes Mandeep Auto is its expansion into advanced manufacturing technologies, including Automatic Gear Hobbling and CNC systems, which were incorporated between 2010 and 2015 to enhance capabilities. The leadership team, with over 25 years of experience, drives the company's vision to exceed customer expectations and shape the future of mobility with integrity and excellence. Their broad product range, long-standing customer relationships, and strong R&D team reflect the company's ethos of leading through innovation. Mandeep Auto's state-of-the-art infrastructure, sophisticated technology, and advanced processing plants are complemented by a talent for innovation, reinforced by world-class marketing and distribution expertise.


Investment in Research and Development


The company's investment in research and development (R&D) is evident from its recent Initial Public Offering (IPO), where it allocated a significant portion of the net proceeds for the expansion of its existing unit. This expansion includes the enhancement of R&D capabilities to meet the rising demand for specialized sheet metal components, auto parts, and machined components. MAIL's focus on R&D is driven by the need to consistently expand its product portfolio and develop new designs that meet the evolving requirements of the diverse industries it serves, including the automotive, material handling, earth moving equipment, railways, defense, and machine tools sectors. The company's strategy involves close engagement with customers to gain insights into industry trends, which informs its product development process. By investing in R&D, MAIL aims to maintain its competitive edge and continue providing high-quality, customized components that adhere to stringent quality control standards.



Mandeep Auto Industries Limited IPO Details


  • Issue Date: The Issue Date in an Initial Public Offering (IPO) refers to the specific day when a company's shares are first made available for public purchase on the stock market. This date is a critical milestone in the IPO process, marking the transition of a company from private to public status and allowing investors to buy shares directly from the company for the first time. (Issue Date: May 13, 2024 to May 15, 2024).


  • Listing Date: The listing date refers to the day when the company's shares are officially listed and begin trading on a stock exchange. This is typically several business days (3-6 days) after the issue date after processes like share allotment and finalization are completed. On this date, investors who were allotted shares during the IPO can begin selling them, and new investors can start purchasing them on the exchange at the prevailing market price. (Listing Date: Tuesday, May 21, 2024).


  • Face Value of Shares: The face value of shares in an Initial Public Offering (IPO) refers to the original cost of the shares as determined by the company going public. It represents the nominal value and is often set at a lower figure, such as Rs. 10 or Rs. 100, which remains constant irrespective of the market price of the share after the company is listed on the stock exchange. When a company launches an IPO, the shares are typically offered at a price that includes this face value plus an additional premium, which reflects the current market valuation of the company. The premium over the face value is determined by the company's financial performance and future growth prospects as assessed by the investment bankers managing the IPO. (Face Value: ₹10 per share).


  • Price Band: A price band of an IPO is the range of prices within which the investors can bid for the shares of a company that is going public. The price band is set by the issuer and the lead managers of the IPO, based on various factors such as the demand and supply of the shares, the financial performance and valuation of the company, and the market conditions. (IPO Price: ₹67 per share).


  • Lot Size: In the context of an Initial Public Offering (IPO), the term "lot size" refers to a fixed number of shares that the issuing company sets as the minimum quantity that investors can apply for. This lot size is predetermined before the IPO and is mentioned in the application forms. The lot size varies from one company to another and is an important factor for investors to consider when applying for an IPO. (Lot Size: 2000 Shares).


  • Total Issue Size: The total issue size represents the total number of shares the company is offering to raise capital through the IPO. This number is determined by the company and its advisors, considering factors like their funding needs and the expected investor demand. The total issue size is then divided by the lot size to determine the total number of lots available for purchase by investors. (Total Issue Size: 3,768,000 shares (aggregating up to ₹25.25 Cr)).


  • Fresh Issue: A Fresh Issue in the context of an Initial Public Offering (IPO) refers to the creation and sale of new shares by a company to the public. Unlike an Offer for Sale, where existing shareholders sell their shares, a Fresh Issue results in the generation of new capital for the company. This capital is typically used for growth initiatives such as expansion, research and development, or debt repayment. (Fresh Issue: 3,768,000 shares (aggregating up to ₹25.25 Cr)).


  • Issue Type: The type of an IPO can vary depending on the market and regulatory conditions. Some of the common types of IPOs are, Fixed priced IPO, Auction IPO, Book Building IPO, and Hybrid IPO. (Issue Type: Fixed Price Issue IPO).


  • Listing At: An integral part of the IPO process is the listing. This refers to the day the company's shares officially begin trading on a stock exchange, such as the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE) in India. Once listed, anyone with a brokerage account can buy and sell the company's shares on the exchange. (Listing at: NSE SME).


  • Retail Shares Offered: Retail shares offered in an IPO refer to the portion of shares that are specifically allocated for individual investors, as opposed to institutional investors. These shares are part of the public offering where companies going public aim to raise capital by selling shares. Retail investors are typically allocated a certain percentage of the total shares available for the IPO. The allotment process for retail investors is designed to be fair and transparent, ensuring that all investors have an equal chance of receiving shares based on their application and market conditions. (Retail Shares Offered: Not less than 50% of the Net Offer).

  • Other Shares Offered: 50% of the Net Offer.


Competitors of Mandeep Auto Industries Limited


The Indian auto component industry is a vast and well-evolved sector that caters to the automobile industry's needs with a wide range of products. Within this industry, Mandeep Auto Industries Limited faces competition from several firms. Some of the notable competitors include:


1. Kranti Industries Limited: Specializing in the manufacturing of precision machined components, Kranti Industries serves various sectors such as automotive, agriculture, and construction equipment industries.


2. Porwal Auto Components Limited: This company focuses on the production of ductile iron, grey iron, and steel castings that are used in commercial vehicles, tractors, diesel engines, and other machinery.


3. Lumax Auto Technologies Limited: Lumax offers a broad spectrum of automotive solutions including integrated plastic modules, gear shift levers, intake systems, and other components for the Indian automotive industry.


These competitors are part of a larger group that vies for market share in the auto component sector. They compete on various fronts such as price, quality, innovation, and the ability to meet customer demands promptly. The competition is not only limited to the domestic market but also extends to the international arena where quality standards and cost-effectiveness become key differentiators.


Mandeep Auto Industries Limited has recently made headlines with its initial public offering (IPO), aiming to raise capital for expansion and debt repayment, indicating a strategic move to strengthen its position in the market.


The company's financial performance has shown resilience with reported revenues and net profit, reflecting its capability to sustain and grow amidst competitive pressures. The IPO is a significant step for Mandeep Auto Industries Limited, as it seeks to enhance its manufacturing capabilities and increase its market presence.


Investors and industry watchers will be keenly observing how Mandeep Auto Industries Limited leverages the capital raised from the IPO to navigate the competitive landscape and carve a niche for itself in the auto component industry. The company's future strategies and performance will be a testament to its ability to adapt and thrive in an ever-changing and challenging market environment.


Conclusion


Mandeep Auto Industries Limited's IPO presents a compelling opportunity for investors seeking to diversify their portfolio in the manufacturing sector. With a consistent track record of growth and a strategic expansion plan in place, the company is well-positioned to capitalize on the increasing demand for its specialized components across various industries. While the IPO is fully priced based on FY24 annualized earnings, the long-standing customer relationships and the focus on expanding the product portfolio make it an attractive proposition for medium to long-term investment. Prospective investors should consider their investment goals and risk appetite in light of the company's performance indicators and market potential before participating in the IPO.


Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing securities, that suit your needs. The performance and returns of any equity stock can neither be predicted nor guaranteed.


FAQs


Q: What is an IPO?

An Initial Public Offering (IPO) is a process through which a privately held company offers its shares to the public for the first time and becomes a publicly traded company.

 

Q: How can I apply for an IPO?

You can apply for an IPO through various methods:


ASBA (Application Supported by Blocked Amount): In this method, your application money remains in your bank account until the basis of allotment is finalized.

UPI (Unified Payment Interface): You can authorize the blocking of funds in your bank account using UPI while applying for an IPO.


Q: What is ASBA?

ASBA stands for Application Supported by Blocked Amount. It allows your application money to be blocked in your bank account during the IPO bidding process. You continue to receive interest on the blocked amount.


Q: What is the difference between book building and a normal public issue?

Book building is a process where demand for securities is elicited and the price is assessed based on investor bids. In a normal public issue, the price is fixed by the issuer.


Q: Can I make payments through UPI for IPOs?

Yes, you can use UPI as a payment method for IPOs. The UPI platform blocks the funds for IPO applications after you approve the fund block mandate request.


Q: What is the minimum order quantity for an IPO?

The minimum number of shares you can apply for in an IPO is known as the minimum order quantity. It varies for each IPO.


Q: What is the cut-off price in an IPO?

The cut-off price is the price at which you bid for shares without specifying a particular price. It allows you to participate in the IPO without specifying a specific bid price.


Q: Can I revise my bids during the IPO process?

Yes, you can revise your bids multiple times before the IPO bidding period ends.


Q: Which banks offer the ASBA facility for IPOs?

Several banks, known as Self Certified Syndicate Banks (SCSBs), offer the ASBA facility. Some examples include HDFC Bank, ICICI Bank, Axis Bank, and SBI.


Q: How do I find IPO mandates on UPI apps?

You can check the list of UPI handles supported for IPO payments on the National Payments Corporation of India (NPCI) website. These handles allow you to apply for IPOs using UPI.



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