Mehul Colours, a leading innovator in masterbatch solutions, is set to launch its Initial Public Offering (IPO) from July 30, 2025, inviting investors to participate in a fresh issue of ₹21.66 Crores comprising 30.08 lakh equity shares. The company focuses on enhancing the functionality, aesthetics, and performance of plastics across diverse industries such as packaging, automotive, and construction through tailored blends of pigments, additives, and resins. Their products are designed for vibrant colours, UV resistance, and other specialised properties, delivered with an emphasis on quality, sustainability, and customization.

The price band for the IPO has been set at ₹68 to ₹72 per share, with a lot size of 1,600 shares. Retail investors need to apply for at least 2 lots (3,200 shares), amounting to a minimum investment of ₹2,30,400. The subscription window remains open till August 1, 2025. Shares are expected to be allotted by August 4, 2025, and the listing is anticipated on the BSE SME platform on or about August 6, 2025. At the upper price band, Mehul Colours’ market capitalization will be around ₹75.95 Crores.

The IPO is being managed by Seren Capital Private Limited as the Book Running Lead Manager, while Bigshare Services Pvt Ltd serves as the registrar. Asnani Stock Broker Pvt Ltd is appointed as the Market Maker for this issue.

As of the morning of July 30, 2025, the IPO’s live subscription status showed it was subscribed 0.57 times on the first day, signaling growing investor interest.

The Grey Market Premium (GMP) for Mehul Colours IPO currently stands at ₹11, suggesting an estimated listing price of ₹83, which translates into a potential 15.92% gain over the issue price. It is important to remember that GMP figures are indicative and not a guaranteed price discovery mechanism, as they depend on demand and supply in an unregulated market.

Mehul Colours has successfully raised ₹6.15 Crores from Anchor Investors, who subscribed at the upper price band of ₹72 per share. A total of 8,54,400 equity shares were allotted to anchor investors, reflecting strong institutional confidence.

The net proceeds from the IPO will be primarily utilised for the following objectives:

• ₹14.63 Crores for the capital expenditure related to setting up a new manufacturing facility.

• ₹4.00 Crores to meet the company’s working capital requirements.

• The remaining funds will be used for general corporate purposes.

The company is spearheaded by Mehul Pravinchandra Joshi and Bhakti Mehul Joshi, whose extensive experience in the masterbatch and pigment industry has been instrumental in Mehul Colours’ growth trajectory. Supported by a capable senior management team, the company is focused on expanding its market footprint while maintaining high product quality and innovation.

Financially, Mehul Colours has shown steady growth in recent years:

• Revenues for FY23, FY24, and FY25 stood at ₹21.37 Crores, ₹22.66 Crores, and ₹23.71 Crores, respectively.

• EBITDA rose from ₹4.37 Crores in FY23 to ₹7.78 Crores in FY25.

• Profit after tax grew from ₹2.94 Crores in FY23 to ₹5.50 Crores in FY25, indicating solid operational efficiency.

Key valuation metrics show the company’s pre-issue EPS at ₹7.3 and post-issue EPS at ₹5.2 for FY24. The pre-issue P/E ratio is 9.86x, with a post-issue P/E of 13.80x, which is attractive compared to the industry average of 27x. Additionally, Mehul Colours boasts a robust ROCE of 43.53% and ROE of 38.46% for FY24, demonstrating effective use of capital and strong profitability.

Considering the company’s financial health, innovative product offerings, and a favorable GMP, the IPO could be attractive to risk-tolerant investors seeking listing gains. However, investors should carefully assess the investment risk associated with SME IPOs and high minimum application sizes.

In summary, the Mehul Colours IPO offers investors a chance to invest in a quality masterbatch manufacturer with a focus on innovation, sustainability, and growth. The IPO’s price band of ₹68-₹72 and the GMP of ₹11 indicate a promising listing potential, with allotment and listing scheduled for early August 2025. Investors should perform due diligence and consider their risk profile before applying.

This article is meant for informational and educational purposes only and does not constitute investment advice. Investors should seek guidance from SEBI-registered advisors before making any financial decisions.

The Upcoming IPOs in this week and coming weeks are BLT Logistics, Bhadora Industries, Highway Infrastructure, Flysbs Aviation, Parth Electricals & Engineering, Jyoti Global Plast, Cash Ur Drive Marketing, Renol Polychem, Jyoti Global Plast, Jyoti Global Plast.

The Current active IPO are B.D. Industries (Pune), NSDL, Takyon Networks, Mehul Colours, M&B Engineering, Sri Lotus Developers & Realty, Aditya Infotech, Lakshmi India Finance, Kaytex Fabrics, Umiya Mobile, Repono.

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