Everything You Need to Know About the ₹28 Crore Mehul Telecom SME IPO

Mehul Telecom Private Ltd., incorporated in May 2023,  is a multi-brand mobile retail company based in Rajkot, Gujarat. The organisation transitioned right into a Public Ltd. company in February 2025. Under the management of its promoters, Mehul Vasantbhai Raymagiya and Raymagiya Hemali Mehulbhai. The company is offering smartphones, accessories, and other electronic products by the COCO (company-owned, company-operated) & FOFO (franchisee-owned, franchisee-operated) model. The company was founded by Mr Mehul Vasantbhai Raymagiya in 2023, who brings 17 years of experience in the mobile phone retail industry.

These days, Mehul Telecom has released its IPO, marking its entry into the public market with a fresh issue of up to 28,29,600 shares.

The IPO is entirely a fresh issue, indicating capital requirement for working capital and growth rather than promoter exit.

Industry Analysis 

Mehul Telecom Limited operates in the electronics retail, in the segment of smartphones, accessories, and other devices. Currently, this industry is undergoing a digital transformation as demand is increasing in India, this fueled by the nationwide 5G rollout, higher incomes, and the government's "Digital India" and "Make in India" initiatives. In India, this sector is attracting many government initiatives like Production Linked Incentive (PLI) and favourable Foreign Direct Investment (FDI), allowing 100% FDI, to become the global hub for electronics. India has already become the second-largest manufacturer of phones globally. 

The electronics retail industry is inventory and capital-intensive, relying heavily on supply chain management across both Company Owned Company Operated (COCO) and Franchise Owned Franchise Operated (FOFO) models. Success in this area requires strong partnerships with major global and domestic giants such as Samsung, Apple, and Xiaomi. While Mehul Telecom maintains consistency, reporting a 12.77% YoY revenue increase in FY25. It faces challenges, which include competition from online sellers and a high geographic concentration in the Gujarat region.

The company generates revenue from the sale of mobile phones and accessories through its network of retail outlets and franchise partners.  To differentiate itself, Mehul Telecom leverages the 17-year legacy and expertise of its promoter, through the brand's presence in Rajkot and Morbi since 2008. 

Business Segment

The company has positioned itself as establish player in consumer electronics specially in 2 categories of Mobile Handsets and Accessories.

• Mobile Handsets – This accounts for more than 90% of business from selling smartphones of global and domestic brands like MI, Samsung, Vivo, Oppo, Realme, Nokia, OnePlus, and Apple.

• Accessories – Product includes smartwatches, earbuds, neckbands, power banks, chargers and others.

• Value-Added Services – These are all after-sales services, such as product setup, data transfer, SIM installation and others to better customer experience.

The company's revenue is heavily driven by sales from Mobile Handsets, which represent the majority. The company identifies its ability to offer a wide range of brands under one roof as a strategic advantage, though it also has the inherent risk of inventory in a fast-evolving market.

Business Model 

Mehul Telecom is an organised retail company that bridges the gap between electronics manufacturers and consumers through its network. Revenue is generated from the following channels:

• COCO Stores (Company Owned Company Operated): Stores fully managed and owned by the company, ensuring control over branding and customer service.

• FOFO Stores (Franchise Owned Franchise Operated): A franchise-led model that allows rapid growth and market penetration.

The company is a "Brand-Centric" retail model, maintaining good relations with manufacturers to ensure a supply of the latest devices. But there is a risk associated with the company's major portion of revenue coming only from the Rajkot and Morbi districts of Gujarat. Apart from this, the company has robust growth, revenue from operations reaching ₹120 Cr in FY25 to ₹151 Cr on December 31, 2025.

Business Strategy

The company's strategies are

• Retail Expansion - Focus is on expanding its presence by opening more stores on the COCO model and increasing its franchise (FOFO) network.

• Strengthening Brand - The company prioritises long-term partnerships with global brands to supply inventory.

• Customer Loyalty and After-Sales Support - Beyond the sales, the strategy focuses on support and services to build long-term customer relationships.

• Promoter Expertise: Utilising 17 years of experience from its promoter, Mehul Vasantbhai Raymagiya, in retail distribution, sales, and consumer trends.

• Inventory and Supply Chain: Implementing inventory management in both owned and franchise stores to reduce costs and ensure high demand for products.

Capital Management for Scalability: A primary objective of the IPO is to strengthen the company’s capital, providing the necessary liquidity to fund the expansion of its retail network and manage working capital efficiently.

The promoters of Mehul Telecom are Mehul Vasantbhai Raymagiya and Raymagiya Hemali Mehulbhai 

Working Capital Cycle 

Peer Comparison

Sector Specific Ratio Analysis 

Mehul Telecom Limited is built on India's transition toward 5G, fuelling growth in smartphone penetration. The primary value driver is the ability to provide regional accessibility and a multi-brand "hands-on" experience to a trust-driven consumer base. Mehul Telecom operates within this retail layer, specialising in a multi-brand that spans smartphones, wearables, and other related products.

The company’s scaling is not just because of rising demand but a product of a hybrid retail chain. By mixing Company Owned, Company Operated (COCO) and Franchisee Owned, Franchisee Operated (FOFO) models, the company has effectively balanced brand control with asset-light scalability. Starting from a single proprietorship in 2008, the business has grown into a regional powerhouse with 80 stores across Gujarat as of December 2025.

Financial performance highlights the business at an operational inflexion point. Mehul Telecom has shown high growth, with revenue rising from ₹80 Cr in FY23 to ₹151 Cr (9M FY26). Even more significant is the profitability trajectory; Profit After Tax (PAT) surged from ₹0.51 Cr in FY23 to ₹6 Cr (9M FY26), indicating that as the store network grows, the company is capturing higher margins on its accessories and value-added service segments. With a Return on Equity (ROE) of 59.84% and a Debt-to-Equity ratio of 0.15. 

LMVT Framework 

Leadership: Mehul Telecom is led by its founder-promoters, Mehul Vasantbhai Raymagiya and Hemali Mehulbhai Raymagiya. Mehul Raymagiya brings over 17 years of experience in the mobile retail sector, having started the business as a small proprietorship in 2008. This deep domain expertise is critical in a sector where vendor relationships and inventory turnover are the primary point of survival.

Moat: While mobile retail is often viewed as a fragmented, low-barrier business, Mehul Telecom has built a moat in its region and operations:

• Asset-Light Model: The FOFO model allows for rapid expansion without the capital expenditure, while the COCO stores serve as high-margin flagship hubs for brand experience.

• Regional Dominance: The company's heavy concentration in Gujarat (specifically Rajkot and Morbi) creates a localised brand recall that national competitors often struggle to match.

Valuation: April 2026 IPO pricing suggests a company being valued for its future growth potential while remaining grounded in current earnings.

• Attractive Multiples: At the upper price band of ₹98, the company is valued at a P/E of 10.86x (based on annualised FY26 earnings, which seem to be fairly valued

• Capital Utilisation: The IPO is for working capital requirements, which are essential for stock moving inventory and expanding the product depth of existing outlets.

Tailwinds: The structural tailwinds for Mehul Telecom are driven by India's digital transformation:

• 5G Device Surge: 5G-enabled devices are growing by over 120% YoY, forcing a massive replacement cycle among existing smartphone users.

• ESDM Sector Growth: The Indian electronics manufacturing and retail sector is targeting a $300 billion market by 2026, supported by government incentives.

Conclusion 

Mehul Telecom Limited is not a speculative play, but a pragmatic retail play. It provides the physical backbone required for India's digital transformation. The founder-led execution, an asset-light franchise moat, and strong financials (low debt, high ROE) suggest the company is well-positioned to benefit from the ongoing smartphone replacement cycle. For investors, Mehul Telecom represents an opportunity to participate in the "last-mile" of the Indian digital story, where execution and regional brand trust are the primary drivers of sustained shareholder value.