Why Is True Colors Launching ₹128 Crore SME IPO and Should Investors Subscribe?
True Colors Limited, based in Surat, is a growing distributor of digital textile printers, consumables, inks, and related accessories. With India’s textile hub being Surat, the company benefits from proximity to a massive network of textile manufacturers and exporters. Over the years, True Colors has built strong relationships with international printer OEMs, offering products to a diversified base of textile players. The company’s strength lies in providing end-to-end solutions for digital textile printing, an industry seeing strong adoption due to efficiency, design flexibility, and eco-friendly practices.
IPO Details and Timeline
Use of Proceeds
Draft Red Herring Prospectus (DRHP) Insights
The DRHP highlights that True Colors has shown consistent revenue growth in the last three years, benefiting from increasing demand for digital textile printers in Surat and other textile clusters. The company faces competition from both domestic distributors and international players, but its established market position provides a competitive edge. However, high working capital requirements and foreign exchange risks are important considerations.
Grey Market Premium (GMP) Trend
Risks in the IPO
- High dependence on textile sector cycles exposes it to demand fluctuations.
- Working capital-intensive business; delays in receivables could strain cash flow.
- Technology obsolescence risk due to fast-evolving digital printing solutions.
- SME IPOs generally have lower liquidity and higher volatility.
Valuation and Peer Comparison
At the upper price band of ₹191, True Colors is valued at a P/E multiple of ~17–18x based on FY24 earnings. Compared with listed textile machinery peers like Rajoo Engineers and Himatsingka Seide (trading in the range of 15–22x), the valuation appears reasonable. However, being an SME listing, liquidity and scale risks remain key differentiators.
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Investor Takeaway
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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.











