GMP IPO Watch
Mehul Telecom IPO Day 2: Scaling Gujarat’s Smartphone Retail—Will Investors "Pick Up" the Call?
Rajkot-based Mehul Telecom is currently in the middle of its ₹27.73 crore SME IPO. Operating a network of 80 stores with a massive profit surge in FY25, the company is offering shares at ₹96–₹98. We break down the Day 2 subscription trends, the ₹2.35 lakh entry price, and why the "Asset-Light" franchise model is the key to their growth story.
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1. Live Status: Subscription Update (April 20, 10:00 AM)
After a solid opening on Friday, the momentum is holding steady as we head into the final 48 hours:
Total Subscription: Currently at 3.38x to 3.64x.
Retail Portion: Subscribed 2.34x, showing healthy interest from individual investors.
NII (HNI) Interest: This category is leading the pack, currently oversubscribed by 7.24x.
QIB Portion: Standing at 1.35x. Institutional investors typically place their largest bids on the final day (tomorrow).
Grey Market (GMP): Currently trading at a modest ₹4 to ₹5 premium. This suggests a potential listing price around ₹102–₹103, though sentiment often shifts based on final-day subscription numbers.
2. The Business: The "Saurashtra Retail Powerhouse"
Mehul Telecom is a multi-brand mobile and accessory chain that has mastered the regional market.
Smart Expansion: They operate 80 stores across Gujarat, using a hybrid model: 6 Company Owned (COCO) and 74 Franchise Owned (FOFO). This allows them to scale without heavy debt.
Product Mix: While smartphones (Samsung, Apple, Vivo, etc.) drive 97% of revenue, they are pivoting toward high-margin accessories like wearables, audio devices, and smart home gadgets.
Geographic Focus: They are deeply entrenched in the Rajkot and Morbi districts, leveraging strong brand recall in these high-growth consumer hubs.
3. IPO Snapshot & Timeline
| Event / Detail | Important Dates & Info |
|---|---|
| IPO Closing Date | Tomorrow, Tuesday, April 21, 2026 |
| Price Band | ₹96 to ₹98 per share |
| Lot Size | 1,200 Shares |
| Retail Min. Investment | ₹2,35,200 (2 Lots / 2,400 Shares) |
| Allotment Date | Wednesday, April 22, 2026 |
| Listing Date | Friday, April 24, 2026 (BSE SME) |
4. Financials: The "Growth Sprint"
The company’s recent performance has been explosive, though it remains a high-volume, low-margin business:
Revenue: Surged from ₹80 crore (FY23) to ₹115 crore (FY25).
Net Profit (PAT): Witnessed a massive jump from ₹51 lakhs (FY23) to ₹6.04 crore (FY25).
Efficiency: Boasts a strong ROE of ~34.2%, reflecting a healthy return on equity due to their capital-light franchise model.
Proceeds: Almost ₹23 crore of the IPO funds will go directly into Working Capital, which is essential for stocking the latest high-value smartphone inventory.
5. The Verdict: Pros & Cons
The Bull Case (The "Pros"):
Scalable Model: The FOFO (Franchise) structure means they can enter new towns with very low overhead.
Regional Dominance: Strong brand recall in Saurashtra provides a protective moat against national competitors.
Valuation: At a P/E of ~10.9x (based on annualized FY26 earnings), the pricing appears reasonable for a retail growth story.
The Bear Case (The "Cons"):
Geographic Concentration: Over 80% of revenue comes from just two districts in Gujarat, making them vulnerable to regional shifts.
Online Competition: Relentless pressure from e-commerce giants like Amazon and Flipkart, who can often discount more aggressively.
Low Margins: Retail trading is inherently competitive; any increase in operational costs can quickly eat into the 4–5% PAT margins.
