The company plans to raise about ā¹28 crores through this IPO. This amount comes mainly from a fresh issue of shares worth ā¹28 crores. Each share has a face value of ā¹10.
Though investing in smartphones and accessories is worth it, how can you decide whether the IPO is in demand? Will it provide long-term profit or short-term listing gain?
Read on to know the IPO risks, strengths, valuation, financial details, and expert opinion to make your investment decision better.
Mehul Telecom IPO ReviewĀ
| Review by | Recommendation |
| IPO Watch | |
| Beacon Capital Advisors Pvt. Ltd. (Equivision) | May Apply |
Strengths:Ā
- The retail network includes 80 stores across major districts in Gujarat, focusing on the sale of mobile phones and accessories. This includes 6 COCO stores and 74 FOFO stores spread across 15 districts.
- The company is almost debt-free.Ā Ā
- Mehul Telecom is backed by experienced promoters and a management team with a focus on growth and execution.
- The firm offers a wide range of products consisting of 1100 smartphone models and 500 accessories to meet the requirements of each customer.
Weaknesses:
- Around 80% of the revenue comes from the two districts, viz. Rajkot and Morbi. Any issue that occurs in this region could impact the business and financial condition.
- In FY25, the firm had a negative cash flow of 1,128.69 lakhs. If this continues, it may adversely impact business operations.
- Its business runs on a low margin and high volumes; if fail to grow sales or manage operations, it can affect the business.
- Around 18.43% of the revenue comes from its Top 1 customer. Losing this customer can reduce sales, leading to lower revenue.
Promoters Holding, if any
- Mehul Vasantbhai Raymagiya, aged 42 years, is the Promoter, Chairman, and Managing Director of the Company. He holds 39,84,000 Equity shares, representing 52.27% of the pre-offer Equity shares.
- Raymagiya Hemali Mehulbhai, aged 38 years, is the Promoter and a Non-Executive Director of the Company. She holds 32,00,000 Equity shares, representing 41.98% of pre-offer Equity shares.
Peer Comparison
| Company | EPS (ā¹) | PE Ratio | RoNW % | NAV (ā¹) | Income (ā¹) |
| Fonebox Retail Limited | 4.43 | 20.96 | 13.18% | 33.62 | 342.73 Cr. |
| Jay Jalaram Technologies Limited | 2.87 | 54.98 | 10.02% | 56.81 | 339.09 Cr. |
| Bhatia Communications &Retail (India) Limited | 1.104 | 21.86 | 15.56% | 7.08 | 442.72 Cr. |
Industry P/E
The industry P/E has a lowest of 14.45, a highest of 18.94, and an average of 16.70.
Expansion:Ā
Around ā¹22.95 from the fresh issue would be utilised for the companyās purposes, including working capital needs, and the rest of the money would be allocated towards General Corporate Purpose.
Conclusion – May Apply for Medium to Long Term
My Verdict: India remains stable in smartphones and related accessories. Investment in smartphones and accessories might be worthwhile for investors over the long term. In fact, the demand for accessories is more than for smartphones, and thatās why you should apply the IPO with a medium to long-term perspective.
Financially, in FY25, the firm generated a revenue of ā¹152.02 crore and reported a PAT of ā¹7.07 crore, showcasing steady growth. Coming to its valuations, on the upper price, Mehul Telecom is valued at a PE of 13.02x, which appears fairly valued compared to its peers. As of April 15, the GMP of Mehul Telecom IPO is ā¹0.
Applying for the Mehul Telecom IPO with in-depth research, including financial statements, peer groups’ growth, and fundamentals, provides an idea of the companyās stability that assists you in deciding whether to invest or not.
Please Note:Ā
Investors are advised to make their own decisions and apply entirely at their own risk. This article is written using information from the companyās RHP (Red Herring Prospectus) data and online sources. If you have any queries, kindly contact the IPO Watch Team.
