Mehul Colours Ltd IPO

The IPO opens on 30 Jul 2025 & closes on 01 Aug 2025.

Mehul Colours Limited was acquired under the name of 'Mehul Colours and Masterbatches Private Limited' following the acquisition of the ongoing business of the proprietary concern, M/S Mehul Colour Chem in December 1995. Thereafter, the Company got incorporated as 'Mehul Colours and Masterbatches Private Limited' on 12 December, 1995, pursuant to a Certificate of Incorporation issued by Registrar of Companies, Maharashtra. Thereafter, Company was converted from private limited to public limited, and the name of the Company was changed from 'Mehul Colours and Masterbatches Private Limited' to 'Mehul Colours and Masterbatches Limited' dated December 16, 2024 and subsequently, the name of Company was changed from 'Mehul Colours and Masterbatches Limited' to 'Mehul Colours Limited' vide fresh Certificate of Incorporation issued by the Registrar of Companies, Central Processing Centre, as on January 9, 2024. Company is primarily engaged in the manufacturing of masterbatches, which are used in the plastics industry to impart colour and enhance the functional properties of plastic products. In addition to manufacturing masterbatches, Company is also engaged in the sale of pigments. Masterbatches are concentrated mixtures of pigments and additives that are uniformly dispersed in polymer carriers, facilitating the effective integration of colour and performance-enhancing properties into plastic products. During plastic processing, masterbatches enable the uniform dispersion of pigments within the plastic resin, ensuring consistent colour distribution throughout the final plastic product without uneven patches or variations. They are used to enhance visual appearance and impart specific properties to plastic materials such as UV resistance, flame retardancy and anti-static behavior. The manufacturing operations are carried at two production facilities within the Tungareshwar Industrial Estate, Sativali, Vasai East, Palghar, Maharashtra. In 2024, Company supplied the masterbatches to over 500+ customers spanning a broad array of industries, including stationery, plastic household products, plastic toys, agricultural tools, pipes and fittings, packaging materials, wires & cables, electrical switches & accessories, sheets and various other plastic products. Product line includes colour masterbatches, additive masterbatches, special effect masterbatches and filler masterbatches to meet specific functional and aesthetic needs in plastic manufacturing. Company made a fresh issue initial public offer of 30,08,000 equity shares of face value Rs 10 each in Aug'25.

Mehul Colours Ltd IPO will close on 01 Aug 2025.

<ul><li>In-house manufacturing facility with integrated testing and R&D capabilities.</li><li>Wide diversified customer base spread across various industries & geography.</li><li>Long term relationship with the customers.</li><li>Experienced Promoters with Industry Expertise.</li></ul>

<table class="table"> <thead> <tr> <th>S.No</th> <th>Promoters Name</th> <th>Pre Issue Shares</th> <th>Pre Issue Percentage</th> <th>Post Issue Shares</th> <th>Post Issue Percentage</th> </tr> </thead> <tbody> <tr> <td>1</td> <td>Mehul Pravinchandra Joshi</td> <td>6653520</td> <td>88.23</td> <td>6653520</td> <td>63.07</td> </tr> <tr> <td>2</td> <td>Bhakti Mehul Joshi</td> <td>650000</td> <td>8.62</td> <td>650000</td> <td>6.16</td> </tr> <tr> <td>3</td> <td>Pravinchandra Girdharlal Joshi</td> <td>258</td> <td>---</td> <td>258</td> <td>---</td> </tr> <tr> <td>4</td> <td>Usha Pravinchandra Joshi</td> <td>258</td> <td>---</td> <td>258</td> <td>---</td> </tr> </tbody> </table>

<ul><li>The company derived a significant portion of its revenue from the sale of the company key product i.e. Masterbatches. Any decline in the sales of its key offering could have an adverse effect on the company business, results of operations and financial condition.</li><li>Substantial portion of its revenue has been dependent upon few customers with which the company does not have any firm commitments. The loss of any one or more of its major customers would have a material adverse effect on its business, cash flows, results of operations and financial conditions.</li><li>The Company does not have long-term agreements with suppliers for its input materials and a significant increase in the cost of, or a shortfall in the availability, or deterioration in the quality, of such input materials could have an adverse effect on its business and results of operations.</li><li>There are outstanding legal proceedings involving the Company, its Directors and the company Promoters. Any adverse decisions could impact its cash flows and profit or loss to the extent of demand amount, interest and penalty, divert management time and attention and have an adverse effect on the company business, prospects, results of operations and financial condition.</li><li>The company is subject to strict quality requirements and any failures to comply with quality standards may lead to cancellation of existing and future orders, product recalls, product liability, warranty claims and other disputes and claims.</li><li>The company does not own the existing manufacturing facilities, godown, sales depot and registered office from where the company carry out its business activities. In case of non-renewal of lease agreements or dispute in relation to use of the said premise, the company business and results of operations can be adversely affected.</li><li>Setting up of a new manufacturing facility requires substantial capital outlay before the company realize any benefits or returns on investments and is subject to the risk of unanticipated delays.</li><li>Any disruptions or shutdown of its manufacturing operations at the company existing facilities could have an adverse effect on its business, financial condition and results of operations.</li><li>Our business operations are majorly concentrated in certain geographical regions and any adverse developments affecting our operations in these regions could have a significant impact on our revenue and results of operations.</li><li>We require certain approvals, licenses, registrations and permits to operate our business and failure to obtain or renew them in a timely manner or maintain the statutory and regulatory permits and approvals required to operate our business may adversely affect our operations and financial conditions.</li><li>Our inability to effectively manage risks associated with international sales could significantly impact our overall profitability. These risks include potential losses in foreign markets, disruptions to operations and challenges arising from international trade complexities. </li><li>There have been instances of delays and non-deposit of certain statutory dues, including ESIC, PF and Professional Tax. Any cognizance being taken by respective authorities or future delays or non-compliance in payment of statutory obligations may result in penalties, interest liabilities, or regulatory actions, which could adversely impact our business, financial condition, results of operations and cash flows.</li><li>We intend to utilize a portion of the Net Proceeds for funding our capital expenditure requirements. While we have shortlisted vendors and obtained quotations from them, we are yet to place orders or enter into definitive agreements with the vendors in relation to such capital expenditure requirements.</li><li>Inventories and trade receivables form a major part of our current assets. Failure to manage our inventory and trade receivables could have an adverse effect on our sales, profitability, cash flow and liquidity.</li><li>We have been unable to trace some of our secretarial records including Annual Returns, forms filed for share allotments, director appointment forms, Share transfer forms and other forms filed with ROC prior to FY 2005. </li><li>We operate in a competitive industry and increased competition may lead to a reduction in our revenues, reduced profit margins or a loss of market share.</li><li>We are dependent upon the experience and skill of our Promoters, Key Managerial Personnel and Senior Management Personnel for conducting our business and undertaking our day to day operations. The loss of or our inability to retain, such persons could materially and adversely affect our business performance. In addition, excess rate of attrition amongst the personnel engaged by our Company may have an adverse impact on our business operations.</li><li>If we are unable to manage our growth effectively and further expand into new markets our business, future financial performance and results of operations could be materially and adversely affected.</li><li>The cost of implementing new technologies for our operations could be significant and could adversely affect our business, financial condition and results of operations.</li><li>Changes in technology may render our current technologies obsolete or require us to make substantial investments.</li><li>Our Company is in use of trademark, which is not registered under the Trademarks Act, 1999 as on date of Draft Red Herring Prospectus. Thus, we may be subject to claims alleging breach of third party intellectual property rights.</li><li>Our insurance coverage may not be adequate to protect us against certain operating hazards and this may have a material adverse effect on our business.</li><li>We are dependent on third party transportation providers for the delivery of our raw material and products. Accordingly, continuing increases in transportation costs or unavailability of transportation services may have an adverse effect on our business, financial condition, results of operations and prospects.</li><li>Our operations are subject to high working capital requirements. Our inability to maintain an optimal level of working capital required for our business may impact our operations adversely.</li><li>We have in the past entered into related party transactions and may continue to do so in the future. </li><li>Our Promoters or directors do not possess experience in managing publicly listed companies. </li><li>The Promoters (including Promoter Group) and Directors hold almost 100% of the Equity Shares of our Company and are therefore interested in the Company's performance in addition to their remuneration and reimbursement of expenses.</li><li>Under-utilization of our manufacturing capacities may have an adverse effect on our business, future prospects and future financial performance. Moreover, information relating to capacity utilization of our production facility included in this Draft Red Herring Prospectus is based on certain assumptions and has been subjected to rounding off and future production and capacity utilization may vary.</li><li>The Objects of the Issue for which funds are being raised, are based on our management estimates and have not been appraised by any bank or financial institution or any independent agency.</li><li>Any variation in the utilization of the Net Proceeds as disclosed in this Draft Red Herring Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of our Company. </li><li>We cannot guarantee the accuracy or completeness of facts and other statistics with respect to India, the Indian economy and industry in which we operate contained in the Draft Red Herring Prospectus.</li><li>We could be harmed by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect our financial condition, results of operations and reputation. </li><li>We have not identified any alternate source of funding and hence any failure or delay on our part to mobilize the required resources or any shortfall in the Issue proceeds may delay the implementation schedule.</li><li>Our ability to pay any dividends will depend upon future earnings, financial condition, cash flows and working capital requirements. </li><li>Information relating to our production capacities and the historical capacity utilization of our production facilities included in this Draft Red Herring Prospectus is based on certain assumptions and has been subjected to rounding off and future production and capacity utilization may vary. </li><li>Loans availed by our Company has been secured on personal guarantees of our Promoters. Our business, financial condition, results of operations, cash flows and prospects may be adversely affected in case of invocation of any personal guarantees provided by our Promoters. </li><li>Fraud, theft, employee negligence or similar incidents may adversely affect our results of operations and financial condition.</li><li>There is no monitoring agency appointed by Our Company to monitor the utilization of the Issue proceeds.</li><li>The average cost of acquisition of Equity Shares by our Promoters could be lower than the Issue Price.</li><li>Our Promoters and the Promoter Group will jointly continue to retain majority shareholding in our Company after the issue, which will allow them to determine the outcome of the matters requiring the approval of shareholders.</li><li>Certain data mentioned in this Draft Red Herring Prospectus has not been independently verified.</li><li>Certain key performance indicators for certain listed industry peers included in this Draft Red Herring Prospectus have been sourced from public sources and there is no assurance that such financial and other industry information is complete.</li><li>We are subject to the restrictive covenants of banks in respect of the Loans/ Credit Limits and other banking facilities availed from them.</li><li>The Issue price of our Equity Shares may not be indicative of the market price of our Equity Shares after the Issue and the market price of our Equity Shares may decline below the issue price and you may not be able to sell your Equity Shares at or above the Issue Price.</li><li>Under-utilization of its manufacturing capacities may have an adverse effect on the company business, future prospects and future financial performance. Moreover, information relating to capacity utilization of its production facility included in this Red Herring Prospectus is based on certain assumptions and has been subjected to rounding off and future production and capacity utilization may vary.</li><li>Its business operations are majorly concentrated in certain geographical regions and any adverse developments affecting the company operations in these regions could have a significant impact on its revenue and results of operations.</li><li>The company requires certain approvals, licenses, registrations and permits to operate its business and failures to obtain or renew them in a timely manner or maintain the statutory and regulatory permits and approvals required to operate the company business may adversely affect its operations and financial conditions.</li><li>The company inability to effectively manage risks associated with international sales could significantly impact its overall profitability. These risks include potential losses in foreign markets, disruptions to operations and challenges arising from international trade complexities.</li><li>There have been instances of delays and non-deposit of certain statutory dues, including ESIC, PF and Professional Tax. Any cognizance being taken by respective authorities or future delays or non-compliance in payment of statutory obligations may result in penalties, interest liabilities, or regulatory actions, which could adversely impact its business, financial condition, results of operations and cash flows.</li><li>The company intend to utilize a portion of the Net Proceeds for funding its capital expenditure requirements. While the company has shortlisted vendors and obtained quotations from them, the company is yet to place orders or enter into definitive agreements with the vendors in relation to such capital expenditure requirements.</li><li>Inventories and trade receivables form a major part of its current assets. Failures to manage the company inventory and trade receivables could have an adverse effect on its sales, profitability, cash flow and liquidity.</li><li>The company has been unable to trace some of its secretarial records including Annual Returns, forms filed for share allotments, director appointment forms, share transfer forms and other forms filed with ROC prior to FY 2005.</li><li>The company operates in a competitive industry and increased competition may lead to a reduction in its revenues, reduced profit margins or a loss of market share.</li><li>The company is dependent upon the experience and skill of its Promoters, Key Managerial Personnel and Senior Management Personnel for conducting the company's business and undertaking its day to day operations. The loss of or the company inability to retain, such persons could materially and adversely affect its business performance. In addition, excess rate of attrition amongst the personnel engaged by the Company may have an adverse impact on its business operations.</li><li>If the company is unable to manage its growth effectively and further expand into new markets the company business, future financial performance and results of operations could be materially and adversely affected.</li><li>The cost of implementing new technologies for its operations could be significant and could adversely affect the company business, financial condition and results of operations.</li><li>Changes in technology may render its current technologies obsolete or require us to make substantial investments.</li><li>The Company is in use of trademark, which is not registered under the Trademarks Act, 1999 as on date of Red Herring Prospectus. Thus, its may be subject to claims alleging breach of third party intellectual property rights.</li><li>Its insurance coverage may not be adequate to protect the company against certain operating hazards and this may have a material adverse effect on its business.</li><li>The company is dependent on third party transportation providers for the delivery of its raw material and products. Accordingly, continuing increases in transportation costs or unavailability of transportation services may have an adverse effect on its business, financial condition, results of operations and prospects.</li><li>Its operations are subject to high working capital requirements. The company inability to maintain an optimal level of working capital required for the company business may impact its operations adversely.</li><li>The company has in the past entered into related party transactions and may continue to do so in the future.</li><li>Its Promoters or directors does not possess experience in managing publicly listed companies.</li><li>The Promoters (including Promoter Group) and Directors hold almost 100% of the Equity Shares of the Company and are therefore interested in the Company's performance in addition to their remuneration and reimbursement of expenses.</li><li>The Objects of the Issue for which funds are being raised, are based on its management estimates and have not been appraised by any bank or financial institution or any independent agency.</li><li>Any variation in the utilization of the Net Proceeds as disclosed in this Red Herring Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.</li><li>The company cannot guarantee the accuracy or completeness of facts and other statistics with respect to India, the Indian economy and industry in which the company operates contained in the Red Herring Prospectus.</li><li>The company could be harmed by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect its financial condition, results of operations and reputation.</li><li>The company has not identified any alternate source of funding and hence any failures or delay on its part to mobilize the required resources or any shortfall in the Issue proceeds may delay the implementation schedule.</li><li>Its ability to pay any dividends will depends upon future earnings, financial condition, cash flows and working capital requirements.</li><li>Information relating to its production capacities and the historical capacity utilization of the company production facilities included in this Red Herring Prospectus is based on certain assumptions and has been subjected to rounding off and future production and capacity utilization may vary.</li><li>Loans availed by the Company has been secured on personal guarantees of its Promoters. The company business, financial condition, results of operations, cash flows and prospects may be adversely affected in case of invocation of any personal guarantees provided by its Promoters.</li><li>Fraud, theft, employee negligence or similar incidents may adversely affect its results of operations and financial condition.</li><li>There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.</li><li>The average cost of acquisition of Equity Shares by its Promoters could be lower than the Issue Price.</li><li>Its Promoters and the Promoter Group will jointly continue to retain majority shareholding in the Company after the issue, which will allow them to determine the outcome of the matters requiring the approval of shareholders.</li><li>Certain data mentioned in this Red Herring Prospectus has not been independently verified.</li><li>Certain key performance indicators for certain listed industry peers included in this Red Herring Prospectus have been sourced from public sources and there is no assurance that such financial and other industry information is complete.</li><li>The company is subject to the restrictive covenants of banks in respect of the Loans/ Credit Limits and other banking facilities availed from them.</li><li>The Issue price of its Equity Shares may not be indicative of the market price of the company Equity Shares after the Issue and the market price of its Equity Shares may decline below the issue price and you may not be able to sell your Equity Shares at or above the Issue Price.</li></ul>

The Issue type of Mehul Colours Ltd is Book Building - SME.

The minimum application for shares of Mehul Colours Ltd is 3200.

The total shares issue of Mehul Colours Ltd is 3008000.

Initial public offer of upto 30,08,000 equity shares of face value of Rs. 10/- each (the "Equity Shares") of Mehul Colthes Limited ("the Company" or "MCL" or "the Issuer") at an issue price of Rs. 72 per equity share for cash, aggregating up to Rs. 21.66 crores ("Public Issue") out of which 1,52,000 equity shares of face value of Rs. 10/- each, at an issue price of Rs. 72 per equity share for cash, aggregating Rs. 1.09 crores will be reserved for subscription by the market maker to the issue (the "Market Maker Reservation Portion"). The public issue less market maker reservation portion i.e. issue of 28,56,000 equity shares of face value of Rs. 10/- each, at an issue price of Rs. 54 per equity share for cash, aggregating upto Rs. 20.57 crores is herein after referred to as the "Net Issue". The public issue and net issue will constitute 28.51 % and 27.07 % respectively of the post-issue paid-up equity share capital of the company.