Mehul Colours IPO Day 1: Subscription status, GMP, other key details you need to know

The initial public offering (IPO) of Mehul Colours and Chemicals Limited opened for subscription today and garnered robust investor interest on Day 1. With a strong presence in the dyes, pigments, and specialty chemicals segment, the company’s public issue is being closely watched by both retail and institutional investors, especially given the positive grey market premium (GMP) ahead of listing.

IPO Snapshot: Key Details at a Glance

• IPO Opening Date: July 30, 2025

• IPO Closing Date: August 1, 2025

• Price Band: ₹92 to ₹97 per share

• Lot Size: 1,200 shares

• Total Issue Size: ₹39.6 crore (approx.)

• Listing Exchange: NSE SME Platform

The IPO is a fixed price issue, comprising a fresh issue of 40.82 lakh equity shares. Mehul Colours aims to utilize the proceeds primarily for working capital needs and general corporate purposes.

Day 1 Subscription Status

As per data available till 5 PM on July 30, the Mehul Colours IPO received an enthusiastic response across investor categories:

• Retail Individual Investors (RIIs): Subscribed 2.73 times

• Non-Institutional Investors (NIIs): Subscribed 3.61 times

• Qualified Institutional Buyers (QIBs): Yet to show significant participation

• Overall Subscription: 3.02 times

The strong initial traction signals positive sentiment in the SME IPO segment and investor confidence in the company’s fundamentals.

Grey Market Premium (GMP) Signals a Healthy Listing

The grey market premium (GMP) for Mehul Colours IPO stood at ₹28–₹30 per share as of July 30, indicating an expected listing price of ₹125–₹127, which translates to an impressive 30-31% premium over the upper issue price of ₹97.

Market observers note that GMP is a useful but unofficial metric that reflects investor sentiment before listing. It is subject to change based on broader market conditions and subscription trends in the coming days.

About the Company

Mehul Colours and Chemicals Limited, incorporated in 1998, is engaged in the trading and manufacturing of a broad spectrum of dyes, textile auxiliaries, pigment emulsions, and specialty chemicals. With a significant client base in the textile, leather, and paper industries, the company has built a reputation for delivering high-quality, customized chemical solutions.

The firm operates from its production unit in Gujarat and has a pan-India distribution network. It reported robust financial performance in FY24, clocking a revenue of ₹112.4 crore and a net profit of ₹7.6 crore, up 38% and 45% YoY respectively.

Analyst Views: What Market Experts Say

Rajesh Bansal, Senior Equity Analyst at SMC Global Securities, said:

“Mehul Colours operates in a niche segment with consistent demand across core industrial sectors. Its profitability metrics and growth outlook make it an attractive bet in the SME IPO space. However, investors should be mindful of the risks associated with raw material price fluctuations and working capital requirements.”

Neha Agarwal, IPO Specialist at Swastika Investmart, noted:

“The company has shown impressive revenue growth and stable margins. The issue is reasonably priced given its earnings multiple. The GMP trend reflects healthy demand, but investors should track Day 2 and Day 3 subscriptions closely for a clearer picture.”

Risks and Considerations

While the company exhibits promising financials and growth potential, investors should factor in key risks:

• Heavy dependency on the textile industry

• Price volatility in raw materials like benzene and naphthalene

• Limited global diversification

• SME stocks may have lower liquidity post-listing

Investor Outlook: Should You Subscribe?

The IPO’s current subscription levels and GMP hint at strong listing gains, particularly for short-term investors. From a long-term perspective, the company’s steady growth, efficient working capital cycle, and expanding client base make it a reasonably attractive proposition.

However, given the volatility in the broader market and sector-specific cyclicality, cautious investors are advised to assess risk appetite before making a move.

What’s Next?

The Mehul Colours IPO will remain open for subscription till August 1, 2025. Allotment is expected on August 2, and listing is tentatively scheduled for August 6 on the NSE SME platform.

Investors should track daily subscription trends and updates from the registrar, Bigshare Services Pvt Ltd, for allotment status.