True Colors Makes Weak Debut with 5.00% Discount, Lists at ₹181.45 Against Strong Subscription

True Colors Limited, the digital textile printer importer and distributor serving the textile printing industry, made a disappointing debut on the BSE SME on September 30, 2025. After closing its IPO bidding between September 23-25, 2025, the company commenced trading flat at ₹191 but declined to ₹181.45 with discount of 5.00%.

True Colors Listing Details

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True Colors Limited launched its IPO at ₹191 per share with a minimum investment of 1,200 shares costing ₹2,29,200. The IPO received a strong response with a subscription of 45.46 times - individual investors at a solid 44.42 times, NII at an impressive 50.58 times, and QIB at a strong 43.41 times.

First-Day Trading Performance Outlook

• Listing Price: True Colors share price opened at ₹191, representing no premium from the issue price of ₹191, but declined to ₹181.45, delivering losses of 5.00% for investors, reflecting negative market sentiment towards the textile equipment distribution sector.

Growth Drivers and Challenges

Growth Drivers:

• Full-Fledged Digital Textile Ecosystem: Comprehensive digital textile printing solutions encompassing machinery and ink supply through distribution of brands like KONICA MINOLTA, HOPETECH, and SKYJET, along with sublimation, reactive, and disperse inks for diverse fabric applications.
• Pan-India Service Network: Established presence across India through regional offices and service hubs in key textile manufacturing centres, including Surat, Amritsar, Panipat, Ludhiana, Delhi, Erode, Mumbai, Tirupur, Kolkata, and Varanasi, ensuring rapid service support.

Challenges:

• Sustainability Concerns: Quantum jump in bottom line for FY25 with 199% PAT growth raises concerns about the sustainability of margins and profitability levels amid a competitive textile equipment distribution landscape requiring careful monitoring.
• Aggressive Valuation Metrics: Post-issue P/E of 19.07x and price-to-book value of 6.53x reflecting premium valuation for the SME segment requiring a sustained high growth trajectory to justify pricing amid execution risks.

Utilisation of IPO Proceeds

• Working Capital Requirements: ₹48.90 crore for funding working capital requirements supporting inventory management, business expansion, and operational scale-up across the digital textile printing solutions business.
• Debt Reduction: ₹40.40 crore for repayment of borrowings, improving financial leverage, reducing interest burden, and strengthening the balance sheet for future growth initiatives.
• General Corporate Purposes: Supporting business operations, strategic initiatives, and expansion activities for sustained growth in the competitive digital textile printing equipment distribution segment.

Financial Performance of True Colors

• Revenue: ₹234.05 crore for FY25, showing impressive growth of 45% from ₹160.91 crore in FY24, reflecting strong market demand and successful business scaling in digital textile printing solutions.
• Net Profit: ₹24.69 crore in FY25, representing exceptional growth of 199% from ₹8.25 crore in FY24, indicating substantial operational leverage and remarkable margin expansion benefits.
• Financial Metrics: Exceptional ROE of 70.49%, healthy ROCE of 35.94%, moderate debt-to-equity ratio of 0.86, modest PAT margin of 5.15%, solid EBITDA margin of 17.48%, and estimated market capitalisation of ₹447.36 crore.