Mehul Colours, a company known for its innovation in masterbatch solutions, has announced its Initial Public Offering (IPO), opening for subscription on July 30, 2025, and closing on August 1, 2025. With a Book Built Issue amounting to ₹21.66 crore, the IPO consists entirely of a fresh issue of 30.08 lakh equity shares. This SME IPO has attracted attention with a strong Grey Market Premium (GMP) of ₹11, suggesting an expected listing gain of 15.92%.

The IPO price band is set between ₹68 to ₹72 per equity share, with a lot size of 1,600 shares. Retail investors must subscribe to a minimum of 2 lots (3,200 shares), resulting in a minimum investment of ₹2,30,400. At the upper price band of ₹72, the post-issue market capitalisation of Mehul Colours will stand at ₹75.95 crore.

Business Overview

Mehul Colours Limited operates in the plastics industry, providing customized masterbatch solutions used across industries such as automotive, packaging, and construction. Their product offerings include blends of pigments, additives, and resins that deliver UV resistance, vibrant color consistency, and performance enhancements. With state-of-the-art manufacturing facilities, the company prides itself on sustainability, quality, and customization.

Led by promoters Mehul Pravinchandra Joshi and Bhakti Mehul Joshi, the company has built a reputation for delivering high-performance masterbatches. Their experience and leadership have contributed to the company’s continued financial growth and operational expansion.

IPO Details and Listing Plan

• IPO Opening Date: July 30, 2025

• IPO Closing Date: August 1, 2025

• Allotment Finalisation Date: August 4, 2025 (Tentative)

• Listing Date on BSE SME: August 6, 2025 (Tentative)

• Lot Size: 1,600 shares

• Minimum Retail Investment: 3,200 shares (2 lots) = ₹2,30,400

• Price Band: ₹68 – ₹72

• Total Issue Size: ₹21.66 crore (Fresh Issue Only)

Seren Capital Private Limited is the Book Running Lead Manager, while BIGSHARE SERVICES PVT LTD is the registrar. The Market Maker for this IPO is Asnani Stock Broker Private Limited.

Anchor Investor Participation

Ahead of the public subscription, anchor investors have subscribed for ₹6.15 crore worth of equity shares at ₹72 per share. In total, 8,54,400 equity shares were allocated to anchor investors. This suggests strong institutional confidence in the company and lends credibility to the offer.

Use of Proceeds

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

1. ₹1,463.48 lakh to be used for setting up a new manufacturing facility, which will increase production capacity and operational efficiency.

2. ₹400 lakh earmarked for working capital requirements, ensuring smooth operational flow and meeting increased demand.

3. Remaining funds to be allocated for general corporate purposes, strengthening the company’s overall financial and strategic positioning.

Financial Performance

Mehul Colours has shown consistent revenue growth and strong profitability over the last three financial years.

• Revenue from operations:

  • FY25: ₹2,371.29 lakh

  • FY24: ₹2,265.67 lakh

  • FY23: ₹2,136.60 lakh

• EBITDA:

  • FY25: ₹778.18 lakh

  • FY24: ₹469.47 lakh

  • FY23: ₹437.19 lakh

• Profit After Tax (PAT):

  • FY25: ₹550.30 lakh

  • FY24: ₹321.82 lakh

  • FY23: ₹293.96 lakh

Key Ratios and Valuation

• Pre-Issue EPS (FY24): ₹7.3

• Post-Issue EPS (FY24): ₹5.2

• Pre-Issue P/E Ratio: 9.86x

• Post-Issue P/E Ratio: 13.80x

• Industry P/E Benchmark: 27x

• ROCE (FY24): 43.53%

• ROE (FY24): 38.46%

• RoNW: 32.26%

These numbers reflect a healthy operational structure and efficient capital utilization, making the IPO valuation look fair and attractive, especially when compared to the industry average.

Grey Market Premium (GMP) and Listing Outlook

As of 28 July 2025, the GMP for Mehul Colours IPO stood at ₹11, indicating a listing price expectation of ₹83 against the issue price of ₹72. This represents a potential listing gain of 15.92%, which makes it an appealing option for risky investors looking for short-term listing gains.

It must be noted that the Grey Market Premium is based on unofficial market sentiment and should only be considered as indicative information, not as investment advice.

IPO Subscription Process and Allotment Guide

Interested investors can subscribe through their broker platforms. Once the subscription closes, allotment will be finalized tentatively on August 4, 2025. Investors can check their allotment status by:

• Visiting the registrar’s website (BIGSHARE SERVICES)

• Selecting “Mehul Colours IPO” from the dropdown

• Entering Application No., PAN, or DP Client ID

• Submitting the details to get real-time status

Conclusion and Expert View

Given the robust financial track record, strategic expansion plans, and a reasonable valuation, the Mehul Colours IPO offers a compelling case for short-term listing gains. The anchor investment of ₹6.15 crore and a positive GMP further validate investor interest. While the IPO is mainly suited for risky investors seeking immediate returns, long-term prospects will depend on the company’s ability to scale operations post-expansion.

However, prospective investors should always assess their own risk appetite and consult with financial advisors before subscribing.

Disclaimer: The information provided here is for educational and informational purposes only. It is based on publicly available data and should not be construed as financial advice. Investment in securities is subject to market risks. Always read related documents carefully before investing. Neither the author nor the platform guarantees investment performance or return.

The Upcoming IPOs in this week and coming weeks are Highway Infrastructure, Flysbs Aviation, Part Electricals & Engineering, Jyoti Global Plast, M&B Engineering, Cash Ur Drive Marketing, Renol Polychem, Jyoti Global Plast, Takyon Networks, Mehul Colours, Sri Lotus Developers & Realty, Jyoti Global Plast, B.D. Industries (Pune), NSDL.

The Current active IPO are Aditya Infotech, Lakshmi India Finance, Kaytex Fabrics, Umiya Mobile, Repono, Shree Refrigerations, Sellowrap Industries, Shanti Gold International, Patel Chem Specialities.

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