Mehul Colours Limited, a Gujarat-based manufacturer of customized masterbatches for the plastic industry, opened its ₹21.66 crore IPO for subscription on July 30, 2025. The Book Built Issue comprises a fresh issue of 30.08 lakh equity shares, and will close on August 01, 2025. The price band is set at ₹68 to ₹72 per share, and the expected listing date is August 06, 2025, on the BSE SME platform.

The company is known for its innovative pigment, additive, and resin-based masterbatch solutions catering to industries such as packaging, automotive, and construction. Mehul Colours focuses on vibrant colours, UV resistance, and customized formulations, providing both aesthetic and functional enhancements for plastic products.

IPO Details and Offer Structure

The lot size is 1,600 shares, and retail investors need to apply for a minimum of 2 lots, amounting to ₹2,30,400 at the upper price band. The post-issue market capitalisation at ₹72 per share is estimated at ₹75.95 crore.

• Issue Size: ₹21.66 crore

• Price Band: ₹68 – ₹72

• IPO Opening Date: July 30, 2025

• IPO Closing Date: August 01, 2025

• Allotment Date: August 04, 2025

• Listing Date: August 06, 2025

• Lot Size: 1,600 shares

• Minimum Investment: ₹2,30,400

Seren Capital Private Limited is the Book Running Lead Manager, BIGSHARE SERVICES PVT LTD is the Registrar, and Asnani Stock Broker Private Limited is the Market Maker.

Grey Market Premium (GMP) and Investor Sentiment

As of July 28, 2025, the Grey Market Premium (GMP) stands at ₹11, indicating a potential listing price of ₹83, i.e., a 15.92% gain over the upper price band of ₹72. While GMP is unofficial and based on informal markets, it gives insight into investor sentiment.

Anchor Investor Participation

The IPO received a strong anchor investor response, raising ₹6.15 crore from institutional investors at the upper band price of ₹72 per share. A total of 8,54,400 equity shares were allocated to anchor investors on July 29.

Real-Time Subscription Status

As of 11:30 AM on July 31, the IPO was subscribed 1.03 times, indicating positive traction among retail and institutional investors.

Objectives of the Issue

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

1. ₹14.63 crore for setting up a new manufacturing facility.

2. ₹4 crore for working capital requirements.

3. Balance for general corporate purposes.

Financial Performance Overview

Mehul Colours has shown steady revenue and profit growth over the last three financial years:

The EBITDA margin improved significantly, reflecting operational efficiency.

Valuation and Key Ratios

The IPO valuation appears reasonable when compared to industry peers:

• Pre-Issue EPS: ₹7.3

• Post-Issue EPS: ₹5.2

• Pre-Issue P/E: 9.86x

• Post-Issue P/E: 13.80x

• Industry P/E: 27x

• ROCE (FY24): 43.53%

• ROE (FY24): 38.46%

• RoNW: 32.26%

These ratios suggest efficient capital utilisation and strong profitability, with the IPO being fairly priced relative to sector benchmarks.

Promoters and Leadership

The company is promoted by Mehul Pravinchandra Joshi and Bhakti Mehul Joshi, both having extensive experience in the pigment and masterbatch industry. Their leadership has been instrumental in driving the company’s customization-centric and quality-driven approach.

How to Check Allotment Status

Investors can check their allotment status from August 04, 2025, using the following steps:

1. Go to the IPO allotment status page on the Registrar's website.

2. Select Mehul Colours Limited IPO.

3. Enter Application Number, PAN, or DP Client ID.

4. Submit to view the allotment status.

Should You Apply?

Considering the 15.92% GMP, strong anchor interest, growing financials, and a reasonable P/E ratio, the IPO presents moderate upside for listing gains. However, due to the SME nature of the listing and volatility, we recommend this IPO only to investors with a higher risk appetite.

Disclaimer

The above analysis is for educational and informational purposes only and does not constitute investment advice. IPO investments are subject to market risks. Kindly consult your financial advisor before investing.

The Upcoming IPOs in this week and coming weeks are BLT Logistics, Bhadora Industries, Highway Infrastructure, Parth Electricals & Engineering, Jyoti Global Plast, Essex Marine, Aaradhya Disposal Industries.

The Current active IPO are Flysbs Aviation, Cash Ur Drive Marketing, Renol Polychem, B.D. Industries (Pune), NSDL, Takyon Networks, Mehul Colours, M&B Engineering, Sri Lotus Developers & Realty.

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