hi, himanshi!
two main questions:
1) is your object of Entity1 being committed?
2) are you setting the association on the Entity2 objects to Entity1?
then (i don't have the full context, but maybe this is helpful), here is an add-on to look into the longevity of your code, maybe consider an entity to store your multi-select options:
1) if this entity is called MultiSelectOption, you can store an attribute with OptionName
2) create and commit the options (in your case, 'stage 1', 'stage 2', etc.) as MultiSelectOption objects ('stage 1' being stored under OptionName)
3) create a one-to-many association from Entity1 to MultiSelectOption
4) present it to the user using the nifty Simple Checkbox Set Selector
5) loop through the associated objects and map it to your Entity2. depending on your requirements, you might not need Entity2 at all, and you can just commit the associations between Entity1 and MultiSelectOption, then retrieve the selection through filtering by Entity1 as the associated object
this way, you can reuse options, avoid the concatenated string being out of date, and you have more flexibility to add, change or remove options!
hope this helps