Mehul Colours used 63% of IPO proceeds by September 2026

Mehul Colours Limited had used Rs 13.7105 crore, about 63% of its Rs 21.6576 crore initial public offer proceeds, by September 30, 2026, while Rs 7.8275 crore allocated to a new manufacturing facility remained unspent in a separate bank account. Mehul Colours reported no deviation or variation in the stated use of funds.

How much of Mehul Colours' IPO proceeds were used?

Mehul Colours had utilised Rs 13.7105 crore from total IPO proceeds of Rs 21.6576 crore as of September 30, 2026, leaving Rs 7.9471 crore unutilised. The utilisation represents about 63% of the amount raised, based on the allocation and spending statement certified by the statutory auditor on November 7, 2026.

The IPO-fund statement separates proceeds into four objects: a new manufacturing facility, working-capital requirements, general corporate purpose and issue-related expenses. Of the Rs 21.6576 crore raised, the new-facility allocation was Rs 14.6348 crore, making it the largest stated object and the main reason funds remained unspent at the reporting date.

The Rs 7.9471 crore total balance consists of Rs 7.8275 crore earmarked for the manufacturing facility and Rs 11.96 lakh for general corporate purpose. The auditor’s certificate says both unutilised amounts were temporarily lying in a separate bank account. It does not identify interest earned on that account or a date by which the balance must be deployed.

The IPO disclosure identifies August 6, 2025 as the date of listing on BSE Limited and uses September 30, 2026 as its reporting date. The reported Rs 13.7105 crore utilisation is therefore a position at September 30 rather than a cash-balance update after the November 7, 2026 filing.

What remains for Mehul Colours' new manufacturing facility?

Mehul Colours had spent Rs 6.8073 crore of its Rs 14.6348 crore IPO allocation for setting up a new manufacturing facility, leaving Rs 7.8275 crore unutilised as of September 30, 2026. This means about 47% of the facility allocation had been deployed, while about 53% was still held separately.

The facility object accounts for almost all of the remaining IPO balance. Of the Rs 7.9471 crore unutilised proceeds, Rs 7.8275 crore related to the new facility, with Rs 11.96 lakh associated with general corporate purpose. Mehul Colours did not disclose a revised facility allocation, a modified object or an alternate use for the balance.

The financial statements show property, plant and equipment of Rs 11.019 crore on September 30, 2026, compared with Rs 3.9529 crore on March 31, 2026. The half-year cash-flow statement also records purchases of fixed assets of Rs 7.4416 crore for the period ended September 30, 2026. These reported amounts provide context on capital investment during the period, but the filing does not expressly reconcile them to the Rs 6.8073 crore IPO utilisation for the facility.

Mehul Colours describes its sole reportable segment as manufacturing of masterbatches under Accounting Standard 17. The proceeds statement specifically identifies the facility expenditure as capital expenditure towards setting up a new manufacturing facility, but does not provide its location, capacity, commissioning schedule or expected revenue contribution.

Which IPO objects has Mehul Colours completed?

Mehul Colours had fully used the Rs 4 crore allocated to working-capital requirements and the Rs 2.8115 crore allocated to issue-related expenses by September 30, 2026. Those two objects together account for Rs 6.8115 crore of the Rs 13.7105 crore total spending reported in the IPO utilisation statement.

Working capital was the second-largest IPO object after the new facility. Its Rs 4 crore allocation was completely utilised, with no unspent amount listed. In contrast, the facility allocation still had Rs 7.8275 crore available, so deployment differed between the two operating uses of IPO money.

Issue-related expenses were also fully utilised at Rs 2.8115 crore, exactly matching the original allocation. The filing labels this object as issue expenses in relation to the issue, and the deviation statement records no modified allocation and no deviation against it.

General corporate purpose was the smallest disclosed allocation at Rs 21.13 lakh. Mehul Colours had used Rs 9.17 lakh by September 30, 2026 and retained Rs 11.96 lakh in the separate bank account. About 43% of this allocation had been used, unlike the complete use reported for working capital and issue expenses.

Did Mehul Colours report any IPO-fund deviation?

Mehul Colours reported no deviation or variation in the use of IPO funds as of September 30, 2026. Its Regulation 32 statement shows no modified object, no modified allocation and no amount of deviation or variation for each of the four stated IPO objects.

The statement says the Audit Committee reviewed the disclosure and the Board took it on record at their respective meetings held on November 7, 2026. It also records “None” for Audit Committee comments and auditor comments on deviation or variation, while noting that a monitoring agency was not applicable.

The filing defines a deviation or variation as a change in IPO objects or purposes, a difference in amounts actually used against the original disclosure, or a change in terms of a contract referred to in the fund-raising document. The reported Rs 7.9471 crore unspent balance is therefore presented as temporarily held for its original objects rather than as a diversion of proceeds.

Mehul Colours’ short-term borrowings fell to Rs 65.54 lakh on September 30, 2026 from Rs 1.3058 crore on March 31, 2026, while long-term borrowings rose to Rs 2.1271 crore from Rs 65.59 lakh. These balance-sheet movements are separate from the IPO-proceeds disclosure, which says the Rs 4 crore working-capital allocation had already been fully used.

Conclusion

Mehul Colours had deployed about 63% of its Rs 21.6576 crore IPO proceeds by September 30, 2026, with full use of Rs 4 crore for working capital and Rs 2.8115 crore for issue expenses. The unspent balance was concentrated in the new-facility object, where Rs 7.8275 crore remained from the Rs 14.6348 crore original allocation, and the company reported no deviation from its stated objects.

The September 30, 2026 disclosure leaves the timing of the new facility unresolved because it provides no completion target or deployment deadline. Subsequent disclosures will show when Mehul Colours uses the Rs 7.8275 crore facility balance and the Rs 11.96 lakh general-corporate-purpose balance that were temporarily held in separate bank accounts.