Mehul Telecom IPO

Mehul Telecom Ltd. is a Gujarat-based retailer operating a chain of 80 mobile stores (mostly franchisee-run) under the "Mehul Telecom" brand. While they deal in a variety of gadgets and home appliances, they are heavily dependent on smartphone sales, which make up 97% of their revenue. Currently, they are launching a maiden IPO of Rs. 27.73 crore to fund working capital. However, the financials are highly questionable; profits saw a sudden, suspicious surge starting in FY25, raising doubts about the sustainability of these margins. While the P/E ratios based on these "inflated" earnings look attractive at 10.86, the reality is that the issue is fully priced. Given the company's thin operating history and the "eyewash" comparison to listed peers, investors should be extremely cautious. Despite the lead manager’s decent past track record, the aggressive, possibly manufactured earnings jump makes this a risky bet for long-term wealth creation.