Mehul Telecom Ltd. IPO

Mehul Telecom 

• Mehul Telecom is coming out with an initial public offering (IPO) of 28,29,600 shares in a price band of Rs 96-98 per equity share. 
• The issue will open on April 17, 2026 and will close on April 21, 2026.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 9.60 times of its face value on the lower side and 9.80 times on the higher side.
• Book running lead manager to the issue is Cumulative Capital.
• Compliance Officer for the issue is Richie Dhrumil Vandra.

Profile of the company

Mehul Telecom is in the business of operating a multi-brand mobile retail chain offering smartphones and Other electronic products and accessories through a hybrid ‘COCO’ (Company Owned, Company Operated) and ‘FOFO’ (Franchisee Owned, Franchisee Operated) retail model. Its retail portfolio comprises products from leading smart phone and phone accessory manufacturers viz., MI, Samsung, Vivo, Oppo, Realme, Nokia, OnePlus, Redmi, Nothing, Tecno, Intel, Infinix, Xiaomi and other popular Brands. 

In addition to handsets, it retails connected lifestyle products and peripherals such as Air Conditioners, Refrigerators, Washing Machines, Televisions, wearables, audio devices, and power solutions like speakers, smartwatch, ear phones, head phones, tablets, mobile covers, phone chargers, screen guards, power banks, phone warranty plans, fire sticks, car holder clamps, pen drive etc. of various brands. Its stores support omnichannel checkout including UPI, mobile wallets, and integrated POS terminals. It operates under the brand name ‘Mehul Telecom’. It operates from total 80 stores across the state of Gujarat out of which 6 are COCO stores and 74 are FOFO stores. 

It focuses on offering products that meet the requirements of its customers by balancing quality and affordability, including offering flexible finance options. Drawing on the expertise of its promoters, a diverse product portfolio, its wide distribution network and focus on customer service as well as the increasing demand for smartphones and related products, it proposes to enhance its presence across Gujarat.

Proceed is being used for:

• Funding of working capital needs 
• General corporate purposes
• Issue related expenses 

Industry Overview

Electronics industry is the world’s largest and fastest growing industry and is increasingly finding application in all sectors of the economy. The government’s support for the electronics industry has been strong, with numerous conducive policies. The government of India is focusing on manufacturing electronics hardware within India, which seems to be the conceptual origin for both the Make in India and the Digital India programmes. These initiatives encourage domestic manufacturing and exports across the electronics system design and manufacturing (ESDM) value chain. India’s production of electronics is estimated at $90 billion and export is estimated to be $23 billion. Apart from policies like the Make in India initiative, the National Policy on Electronics (NPE) 2019 and Digital India, the Indian government has also backed the sector with the Electronics Development Fund (EDF), the Modified Special Incentive Package Scheme (MSIPS), the Phased Manufacturing Programme (PMP), Preferential Market Access (PMA), and by rationalising the duty structure. 

India has emerged as the second largest manufacturer of mobile phones in the world. Over 200 units are manufacturing cellular mobile phones and parts / components thereof in the country, up from only 2 units in 2014. The domestic demand is almost completely being met out of domestic production. India which was importing 90 per cent of its mobile phones till 2014 is now catering to 97 per cent of all mobile phones that are consumed in India. The electronics sector of India contributes around 3.4% of the country’s Gross Domestic Product (GDP). The government has committed nearly $17 billion over the next six years across various incentive schemes to grow the industry. The Government of India has also worked on making the county investor-friendly and has been laying out the red carpet for manufacturing companies.

India has a very strong manufacturing base for electronics components. Electronic components are considered to be the building blocks for this sector. A proper and impeccable structure of manufacturing electronic components requires a supportive ecosystem and a high capital investment. India produces high quality electronic components mainly electro- mechanical components (like printed circuit boards, connectors, etc.) and passive components (like wound components, resistors, etc.). Over the years, the active components (like integrated circuits, diodes, etc.) and the associated components (like optical disc, magnets, RF Tuners, etc.) have also witnessed its growth. India is a global R&D hub and the third largest start-up ecosystem in the world. India is home to over 1140 R&D Centres of Global MNCs employing 900,000 plus professionals. India is the preferred investment destination for electronics manufacturing given the low cost of manufacturing combined with the rapid transformation in ease of doing business. 100% FDI is allowed under the automatic route. Under Defence electronics, FDI up to 49% is allowed under automatic route and beyond 49% through government approval.

Pros and strengths

Extensive distribution network in Gujarat: Its retail footprint spans 80 locations across key districts in Gujarat, specializing in the sale of mobile handsets and accessories. This network comprises 6 COCO stores (Company and Company Operated Stores) and 74 FOFO stores (Franchise Owned and Franchise Operated Stores), spanning 15 districts. Its extensive network enables it to achieve broad geographical reach and strong positioning within the state, ensuring coverage across diverse markets. 

Comprehensive product range: The company is a multi-brand retailer offering a wide selection of smartphones and accessories from leading manufacturers such as MI, Samsung, Vivo, Oppo, Realme, Nokia, OnePlus, Redmi, Nothing, Tecno, Intel, Infinix, Xiaomi and other popular Brands in Gujarat. With an extensive assortment comprising around 1100 SKUs for smartphones and 500 in other accessories, it is equipped to meet a wide spectrum of aesthetic and functional preferences of its customers. 

Low capital requirements for growth: One of its key strengths lies in its low capital requirements for expansion, allowing the company to achieve sustainable growth with minimal financial outlay. By leveraging a franchise model and efficiently managing inventory and logistics, it can expand its retail footprint without significant upfront investment. This capital-efficient approach not only accelerates its market penetration but also maximizes return on investment, enabling the company to focus resources on core areas such as product innovation, customer service and brand building.

Risks and concerns

Store network optimization and performance-based rationalization: Opening and closing of stores is a regular part of the company’s business and depends mainly on the revenue generating potential of each location. Store performance is influenced by factors such as location, customer footfall, product mix, and operating efficiency. High-revenue stores are retained to strengthen its retail network, while underperforming outlets are rationalized or closed. This approach, while optimizing operations, exposes it to risks of site selection errors, demand misjudgment, and closure-related costs. Although the company has pursued consistent growth by expanding into high-potential markets and targeting diverse customer segments, there can be no assurance that newly opened stores will achieve projected performance levels or that targeted markets will deliver the anticipated returns. Frequent store closures, though intended to improve efficiency, may result in increased costs and could adversely affect profitability.

Geographical concentration risk in Gujarat: Its operations and revenues are limited to and concentrated in the geographical region of the State of Gujarat. In the State of Gujarat also its business revenue is generated mainly from two districts viz., Rajkot and Morbi i.e., Rs 12517.01 lakh, Rs 8,766.57 lakh, Rs 1,620.29 lakh, Rs 8,193.94 lakh and Rs 6,149.58 lakh constituting 82.36% , 76.38%, 81.69%, 76.43% and 76.73% of the total revenue from operations for the financial year/period ended December 31, 2025, March 31, 2025, April 21, 2024, March 31, 2024, March 31, 2023, respectively. Any adverse development affecting its operations in this region or any saturation could have an adverse impact on its business, financial condition and results of operations.

Risk of limited product diversification in the mobile phone industry: Its business operations are exclusively focused on the diversification of telecom products mainly, mobile phones, accessories and other related gadgets, which exposes it to significant risks due to lack of diversification. It operates exclusively in the mobile phone industry which is characterized by rapid technological advancements, intense competition, and frequent product obsolescence, requiring it to adapt swiftly to changing trends and consumer preferences. Additionally, its operations are subject to regulatory requirements, taxation, and consumer protection laws, any changes to which could increase its operational costs. Market saturation, economic downturns, or reduced consumer spending further pose challenges, and its limited product portfolio amplifies these risks, as any adverse developments in the mobile and accessories market could materially impact its revenues, profitability, and overall business sustainability.

Outlook

Mehul Telecom is engaged in multi-brand retail selling of Smart Phones, Other Electronic Products and Allied accessories from manufacturers like MI, Samsung, Vivo, Oppo, Realme, Nokia, OnePlus, Redmi, Nothing, Tecno, Intel, Infinix, Xiaomi and other popular brands. It is in the business of operating a multi-brand mobile retail chain offering smartphones and Other electronic products and accessories through a hybrid ‘COCO’ (Company Owned, Company Operated) and ‘FOFO’ (Franchisee Owned, Franchisee Operated) retail model. On the concern side, competition from online retailers who can offer products at competitive prices and are also able to offer a wide range of products may adversely affect its business and its financial condition, results of operations and cash flows. Further, its operations are heavily reliant on the logistics and transportation systems of the manufacturers' distributors. Any delays, disruptions, or inefficiencies in the distributors' logistics operations could significantly impact the timely availability of products it sells and could have a material adverse effect on its business, financial condition and results of operations.

The company is coming out with a maiden IPO of 28,29,600 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 96-98 per equity share. The aggregate size of the offer is around Rs 27.16 crore to Rs 27.73 crore based on lower and upper price band respectively. On performance front, the revenue from operations for FY25 stood at Rs 12,088.66 lakh whereas in FY24 it was Rs 10,719.83 lakh representing an increase of 12.77%. Moreover, profit after tax for the year ended March 31, 2025, stood at Rs 603.94 lakh and for the year ended March 31, 2024 it was Rs 219.46 lakh representing an increase of 175.19%.

The company is planning to establish additional 3 to 4 Company Owned Company Operated stores, capturing a larger share of the market. It aims to expand its footprint across Gujarat, specially focusing on those districts where store count is low and footfalls are high, while optimizing overhead costs, which will decrease proportionally over time. Also, it aims to expand operations to other high-potential Cities in tier II and tier III within Gujarat. Going forward, it intends to diversify its product portfolio by entering the consumer durables segment, with an initial focus on categories such as washing machines and air conditioners. This strategic expansion aims to leverage its existing brand equity, distribution network to address demand for consumer goods in India’s expanding middle-income segment. Further, it aims to strengthen brand loyalty and ensure a superior consumer experience. Its proactive approach to customer service, including regular follow-ups and feedback mechanisms, ensures that customer concerns are addressed promptly, reinforcing trust in its brand.