A Gujarat mobile retail chain hits the BSE SME with a Rs 28 crore fresh issue
Mehul Telecom Ltd., a multi-brand mobile retail chain from Rajkot, Gujarat, opens for subscription on April 17 with the issue closing on April 21. The company operates 80 stores across the state — 6 Company Owned Company Operated (COCO) and 74 Franchisee Owned Franchisee Operated (FOFO) — under the brand name “Mehul Telecom”, retailing smartphones and accessories from brands including Samsung, MI, Vivo, Oppo, Realme, Nokia, OnePlus, Redmi, and Tecno.
The issue is lead managed by Cumulative Capital Pvt. Ltd.
What the Company Does
Incorporated in May 2023 — though the underlying business traces back to a proprietorship begun in 2008 — Mehul Telecom operates on a hybrid retail model. Its six COCO stores are directly managed by the company, while its 74 FOFO stores are franchisee-run but carry the Mehul Telecom brand and product assortment.
Revenue is almost entirely from mobile phone sales, averaging over 97% per year, with the balance from accessories and peripherals. The stores support omnichannel checkout including UPI, mobile wallets, and integrated POS terminals. As of March 31, 2026, the company had 27 employees on its payroll.
The proceeds of Rs 22.95 crore from the fresh issue will go towards working capital — essentially inventory funding — which is the primary operational requirement for a retail business of this nature. The balance will go to general corporate purposes.
Issue Details
| Particulars | Details |
|---|---|
| Issue Opens | April 17, 2026 |
| Issue Closes | April 21, 2026 |
| Listing | BSE SME (April 24, 2026) |
| Price Band | Rs 96 – Rs 98 per share |
| Face Value | Rs 10 |
| Issue Size | Rs 27.73 crore (100% Fresh Issue) |
| Lot Size | 1,200 shares (min 2 lots = 2,400 shares) |
| Min. Retail Investment | Rs 2,35,200 |
| Post-IPO Market Cap | Rs 102.43 crore |
| BRLM | Cumulative Capital Pvt. Ltd. |
| Registrar | KFin Technologies Ltd. |
| Market Maker | Nikunj Stock Brokers Ltd. |
The IPO constitutes 27.07% of the post-IPO paid-up equity capital. After issuing equity at par, the company issued bonus shares in a ratio of 63:1 in December 2024, resulting in a very low average promoter acquisition cost of Rs 0.16–18.57 per share.
Financial Performance
| Particulars (Rs cr) | FY23 | FY24 | FY25 | 9M FY26 |
|---|---|---|---|---|
| Total Income | 80.27 | 107.37 | 121.02 | 152.02 |
| Net Profit / (Loss) | (0.51) | 2.19 | 6.04 | 7.07 |
| PAT Margin | — | 2.05% | 5.00% | 4.65% |
| RoCE | 30.05% | 42.43% | 47.16% | 34.80% |
Revenue has grown steadily across the reported periods. However, the company swung from a loss in FY23 to profitability in FY24, and then posted a sharp jump in earnings from FY25 onwards — a trajectory that raises natural questions about sustainability in what is an inherently thin-margin, competitive, and fragmented mobile retail segment.
The quantum jump in bottom-line performance aligns suspiciously well with the pre-IPO window, which is a pattern analysts typically flag. Average EPS over the last three fiscals stands at Rs 5.43 and average RoNW at 47.80%.
Valuation
At the upper band of Rs 98, the issue is priced at a P/E of around 10.86x on annualised FY26 earnings and 16.96x on FY25 earnings, and at a P/BV of 3.09x. Listed peers Fonebox Retail, Jay Jalaram Techno, and Bhatia Communications trade at P/E multiples of 13.0x, 15.8x, and 20.6x respectively — though these are not truly comparable businesses and the comparison serves more as a directional reference than a meaningful benchmark.
BRLM Track Record: This is the 6th mandate from Cumulative Capital in the last three fiscals. All five prior listings recorded a premium on the date of listing, ranging from 4.35% to 37.50%.
Observations: Independent analysts reviewing the issue have flagged the sharp surge in net profits from FY25 onwards as a concern, suggesting it may represent inflated earnings ahead of the listing rather than a durable improvement in business fundamentals. The business itself operates in a highly competitive and fragmented segment where differentiating on anything other than store count and service quality is difficult. The issue appears fully priced on recent bumper earnings, as per analysts.