Mehul Colours Limited, a Gujarat-based manufacturer of textile dyes and specialty chemicals, is all set to debut on the Indian SME exchange with its Initial Public Offering (IPO) opening for bidding from 30th July 2025 to 1st August 2025. With an issue size of ₹21.66 crore, entirely comprising a fresh issue of 30.08 lakh equity shares, the company aims to raise funds to expand its production capacity, meet working capital needs, and achieve general corporate goals.
The company’s shares are set to list on BSE SME on 6th August 2025. As an SME IPO, it offers early-stage investors an opportunity to tap into India’s thriving chemicals sector through a company that has demonstrated strong profitability growth and operational prudence.
This comprehensive article dives deep into Mehul Colours IPO details, GMP trends, financial analysis, technicals, promoter shareholding, and whether investors should subscribe or avoid the issue.
IPO Structure and Key Dates
| Event | Date |
|---|---|
| IPO Open Date | 30th July 2025 |
| IPO Close Date | 1st August 2025 |
| Allotment Date | 4th August 2025 |
| Refund Initiation | 5th August 2025 |
| Listing Date | 6th August 2025 |
| Issue Type | Bookbuilding IPO |
| Listing Exchange | BSE SME |
Registrar: Bigshare Services Pvt. Ltd.
Face Value: ₹10 per share
Price Band: ₹68 to ₹72 per share
Lot Size: 1,600 shares per lot (min 2 lots = ₹2.30 lakh investment for retail)
Issue Size and Share Allocation
The Mehul Colours IPO totals 30.08 lakh equity shares, aggregating to ₹21.66 crore. The entire issue is a fresh issue, meaning all proceeds will go directly to the company, without any offer for sale by existing promoters or investors.
Category-Wise Share Reservation
| Category | Shares Reserved | % of Total Shares |
|---|---|---|
| Market Maker | 1,52,000 | 5.05% |
| Qualified Institutional Buyers (QIBs) | 14,25,600 | 47.39% |
| Non-Institutional Investors (NIIs/HNIs) | 10,01,600 | 33.30% |
| Retail Individual Investors (RIIs) | 4,28,800 | 14.26% |
This allocation ensures strong participation from institutional and high-net-worth investors while maintaining space for retail applicants.
Grey Market Premium (GMP) Status
As of the latest available data, the GMP for Mehul Colours IPO is ₹0, meaning there are no listing gains expected based on current grey market activity.
| Date | IPO Price | GMP | Estimated Listing Price | Gain (%) |
|---|---|---|---|---|
| 28-07-2025 | ₹72 | ₹0 | ₹72 | 0.00% |
| 27-07-2025 | ₹72 | ₹0 | ₹72 | 0.00% |
| 26-07-2025 | ₹72 | ₹0 | ₹72 | 0.00% |
Note: While GMP provides directional sentiment, it is not always reflective of actual listing day performance, especially in SME IPOs where liquidity and retail sentiment can change rapidly.
Company Overview
Mehul Colours Limited was incorporated in 1995 and has over 25 years of expertise in manufacturing and supplying textile dyes, pigments, and specialty chemicals. The company is based in Gujarat, one of India’s leading industrial hubs for chemicals and textiles.
Key Strengths:
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Strong presence in the textile chemicals segment
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In-house manufacturing with R&D and testing infrastructure
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Wide geographic and industry customer spread
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Focus on sustainable manufacturing practices
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Experienced promoters and operational leadership
The company has made strategic investments in quality assurance and backward integration, allowing it to retain clients and maintain operational margins.
Financial Performance Overview
Income Statement (FY23–FY25)
| Year Ended | Revenue (₹ Cr) | PAT (₹ Cr) | EBITDA (₹ Cr) |
|---|---|---|---|
| FY25 | ₹23.71 | ₹5.50 | ₹6.88 |
| FY24 | ₹22.66 | ₹3.22 | ₹4.18 |
| FY23 | ₹21.37 | ₹2.94 | ₹3.97 |
Key Takeaways:
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Revenue grew at a 2-year CAGR of 5.34%, indicating stable topline.
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PAT jumped 71% YoY, highlighting effective cost and margin management.
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EBITDA margin stands at an impressive 30.17% in FY25.
Balance Sheet Overview
| Year Ended | Assets (₹ Cr) | Net Worth (₹ Cr) | Total Borrowing (₹ Cr) |
|---|---|---|---|
| FY25 | ₹18.95 | ₹17.06 | NIL |
| FY24 | ₹13.87 | ₹11.56 | ₹0.36 |
| FY23 | ₹10.82 | ₹8.36 | NIL |
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Strong asset buildup and no borrowings as of FY25 reflect a debt-free structure.
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Net worth doubled over three years, signaling financial robustness.
Technical & Valuation Metrics
| Metric | Value (Pre-IPO) | Value (Post-IPO) |
|---|---|---|
| PE Ratio | 9.87 | 13.8 |
| EPS (₹) | 7.30 | 5.22 |
| RoNW | 32.26% | TBD |
| ROE | 38.46% | TBD |
| ROCE | 43.53% | TBD |
| Price to Book Value | 4.70 | TBD |
| Market Cap (Estimated) | ₹75.95 Cr | TBD |
At a PE of 13.8x post-issue, the IPO seems fairly priced, especially considering high RoNW, ROE, and a debt-free balance sheet.
Peer Comparison
| Company | EPS | PE Ratio | RoNW | Revenue (₹ Cr) |
|---|---|---|---|---|
| Mehul Colours Ltd | 7.30 | 9.87 | 32.26 | ₹22.66 |
| Polylink Polymers | 0.96 | 28.00 | 7.13 | ₹74.91 |
| Deep Polymers | 2.13 | 25.68 | 5.75 | ₹107.00 |
Mehul Colours outperforms peers in RoNW and EPS, suggesting operational efficiency and value creation.
Use of IPO Proceeds
The ₹21.66 crore raised through the IPO will be utilized for:
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Setting up a new manufacturing facility for future expansion
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Working capital augmentation to support growing demand
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General corporate purposes to strengthen operations
Promoter Holding
| Promoter | Pre-Issue Holding (%) | Post-Issue Holding (%) |
|---|---|---|
| Mehul Pravinchandra Joshi | 96.86% | TBD |
| Bhakti Mehul Joshi | – | – |
Exact post-issue holding will depend on equity dilution, but a large pre-issue stake suggests strong promoter skin in the game.
Investment Requirements
| Category | Min Shares | Min Investment (₹) |
|---|---|---|
| Retail (2 lots) | 3,200 | ₹2,30,400 |
| S-HNI (3–8 lots) | 4,800–12,800 | ₹3,45,600–₹9,21,600 |
| B-HNI (9+ lots) | 14,400+ | ₹10,36,800+ |
Note: Retail applications are only allowed for 2 lots (fixed), unlike mainboard IPOs.
Pros and Cons
✅ Pros
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Strong profitability and margin profile
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Debt-free balance sheet with healthy reserves
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Stable revenue growth despite SME scale
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Competitive valuation with low PE and high return ratios
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Diversified customer base and ESG focus
❌ Cons
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Low topline scale (₹23 crore revenue)
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Lack of visible GMP traction
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Higher investment requirement for retail investors
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SME IPOs have lower liquidity and higher risk
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Revenue concentration and exposure to textile demand cycles
How to Apply for Mehul Colours IPO?
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Open your trading/demat account with a SEBI-registered broker.
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Log in and visit the IPO section.
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Choose “Mehul Colours Limited IPO.”
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Select lot size (minimum 2 lots = 3,200 shares).
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Submit UPI and approve mandate.
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Wait for allotment on 4th August 2025.
Allotment & Listing
To check allotment:
On BSE:
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Visit bseindia.com
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Navigate to IPO allotment status
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Enter PAN or Application Number
On Registrar Site:
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Visit Bigshare Services portal
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Choose “IPO Allotment”
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Enter application/PAN details
Final Verdict: Should You Invest?
Mehul Colours IPO offers a high-margin, debt-free SME player in a growing chemicals segment. While valuation appears attractive, investors must consider the low GMP, SME liquidity risks, and high investment threshold.
Recommended For:
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HNIs and SME-focused investors with higher risk appetite
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Those seeking exposure to niche chemical manufacturers
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Long-term investors comfortable with SME segment volatility
Not Ideal For:
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Risk-averse investors
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Those with limited capital or looking for short-term gains
Conclusion
The Mehul Colours IPO offers a unique opportunity in India’s textile dye and chemical manufacturing space. Its strong profit growth, robust return ratios, and debt-free status make it an attractive option for well-informed SME investors. However, the absence of GMP buzz and low liquidity caution against speculative bets.
As always, conduct personal due diligence and invest only if the fundamentals align with your investment goals.
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