Mehul Telecom's IPO, despite a 45-fold subscription, shows a muted grey market premium of around 4%. Investors anticipate modest listing gains for the mobile retail chain, which operates primarily in Gujarat. While the company has seen revenue growth, thin margins and intense competition pose challenges for future scaling and profitability.

Mehul Telecom shares to list today. Here's what GMP signals ahead of debut

The upcoming listing of Mehul Telecom is seeing a muted response in the grey market, with the premium hovering around 4%, indicating limited upside for investors on debut despite strong subscription demand. The Rs 28 crore SME IPO, which is set to list on the BSE SME platform, saw robust interest during the bidding period, getting subscribed nearly 45 times overall. The strong response was led by high-net-worth investors, while retail participation also remained healthy.

Despite this strong subscription, the grey market trend suggests that listing gains may remain capped, reflecting cautious sentiment in the broader SME space. The IPO was priced at Rs 98 per share, and based on the current grey market premium, the stock is expected to list with a modest upside.

Mehul Telecom operates a multi-brand mobile retail chain, selling smartphones and related accessories through a mix of company-owned and franchise-operated stores. Its operations are largely concentrated in Gujarat, with a product portfolio spanning major smartphone brands and peripheral devices.

The business model is relatively asset-light, especially through the franchise route, which allows faster expansion with limited capital investment. However, the segment remains highly competitive and fragmented, with thin margins and limited pricing power.

Financially, the company has shown growth in recent periods. Revenue rose to over Rs 150 crore for the nine months ended December 2025, while profit stood at around Rs 7 crore. However, margins remain modest, with EBITDA margins in the range of 6-7%, indicating limited operating leverage.

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The IPO proceeds are primarily being used to fund working capital requirements, which aligns with the company’s trading-led business model. Unlike manufacturing or technology-led companies, the growth here is closely tied to inventory cycles and retail expansion.

For investors, the key question will be whether the company can scale beyond its current regional presence and improve margins over time. While the business offers steady demand linked to smartphone penetration, the lack of differentiation and intense competition remain structural challenges.

In the near term, the listing performance is likely to remain modest unless there is a sharp shift in sentiment. The current grey market trend indicates that while the IPO has seen strong demand on paper, expectations for immediate gains remain measured.

As the stock prepares to debut, investor focus will quickly shift from subscription numbers to execution, profitability and the company’s ability to sustain growth in a crowded retail market.

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