IPO at a Glance
By Kanishk Devbangia, NISM Series XV Certified Research Analyst (NISM-202300182946)
1.What Does This Company Do?
Recode Studios Limited is a Ludhiana-based beauty and personal care (BPC) company incorporated on June 16, 2021. It operates under the 'Recode' brand and sells makeup, skincare, body care, and beauty accessories across India.
The company was built around one simple idea: delivering international-quality cosmetics at affordable price points. Products from global brands like Smashbox, Makeup Forever, and Anastasia Beverly Hills are priced between Rs. 1,800 and Rs. 2,500 for a single item. Recode aims to offer comparable quality for Rs. 600ā800.
The company follows an asset-light, omnichannel distribution model ā meaning it does not own manufacturing facilities. Products are sourced from third-party manufacturers and sold through:
ā¢ Online marketplaces ā Amazon, Nykaa, Myntra, and Flipkart
ā¢ Its own website and mobile application
ā¢ 24 physical stores across 14 states (as of September 2025)
ā¢ 3 Company-Owned, Company-Operated (COCO) stores
ā¢ 21 Franchisee-Owned, Franchisee-Operated (FOFO) stores
As of December 2025, the company offers 350+ SKUs (Stock Keeping Units) across face make-up, eye make-up, lip products, skincare, body care, and beauty accessories. Its offline retail journey began in 2022 with its first franchise store in Raipur.
2. Promoters and Their Background
The company is co-founded and promoted by Dheeraj Bansal, Rahul Sachdeva, Shelly Bansal, Shalini Trehan, Preeti Trehan, and Karan Bansal.
Dheeraj Bansal's background is unconventional for a cosmetics founder ā he started out manufacturing bicycle spare parts in Ludhiana at age 20. He pivoted to cosmetics after connecting with co-founder Rahul Sachdeva, who had prior expertise working with professional makeup brands. This combination of operational and marketing background forms the foundation of the Recode brand.
3. Financial Performance ā What the Numbers Say
Recode Studios has shown meaningful revenue growth and a sharp jump in profitability over recent years. The nine-month period ending December 2025 is particularly strong.
What stands out: Revenue grew 114% from FY2023 to FY2025. More importantly, PAT (profit after tax) jumped from Rs. 0.27 crore in FY2024 to Rs. 3.30 crore in FY2025 ā a 12x increase. The 9-month figure to December 2025 shows Rs. 9.06 crore PAT, suggesting FY2026 full-year profitability will significantly surpass FY2025.
4. Key Performance Indicators (KPIs) ā Explained Simply
Below are the key financial ratios from the IPO filing, with plain-language explanations of what each one means for investors.
5. What Will IPO Money Be Used For?
The fresh issue component (Rs. 39.55 crore) will be deployed as follows:
ā¢ Rs. 5.74 crore ā Capital expenditure for a new warehouse facility at Ludhiana, Punjab
ā¢ Rs. 5.41 crore ā Marketing and advertising to boost brand visibility
ā¢ Rs. 21.00 crore ā Working capital requirements
ā¢ Remainder ā General corporate purposes
The OFS (Offer for Sale) portion means some of the IPO proceeds go to existing shareholders selling their stake ā that money does not go to the company. In this case, the OFS is relatively small at about Rs. 5 crore.
The heavy allocation to working capital (Rs. 21 crore) is consistent with a fast-growing distribution business that needs capital to manage inventory, vendor payments, and expansion costs.
6. IPO Lot Size and Investment Amounts
This is an SME IPO, which means the lot sizes and minimum investment thresholds are significantly higher than mainboard IPOs. Here is the detailed breakdown:
Note: For SME IPOs, retail investors can apply for a maximum of 2 lots. The minimum investment is Rs. 2,52,800 ā significantly higher than mainboard IPOs where you can apply for 1 lot starting from ~Rs. 14,000ā15,000.
7. Grey Market Premium (GMP) ā What It Is and What It Indicates
The Grey Market Premium (GMP) refers to the price at which IPO shares are traded unofficially before they are listed on the stock exchange. This is an unregulated, informal market ā but it is widely tracked as an indicator of investor sentiment.
As of April 29, 2026, the Recode Studios IPO GMP stood at Rs. 11 per share. This suggests an estimated listing price of approximately Rs. 169 (Rs. 158 issue price + Rs. 11 premium) ā a potential listing gain of about 7% over the issue price.
Important caveats about GMP:
ā¢ GMP is not an official or SEBI-regulated figure.
ā¢ It can change drastically between now and listing day.
ā¢ A positive GMP does not guarantee listing gains.
ā¢ GMP should never be the sole basis for an investment decision.
8. How to Apply for Recode Studios IPO
You can apply for this IPO through two methods ā ASBA or UPI ā via your bank or broker.
Method 1 ā Via ASBA (Application Supported by Blocked Amount):
ā¢ Log in to your bank's net banking portal.
ā¢ Navigate to IPO / Investment section and search for Recode Studios.
ā¢ Enter the number of lots (minimum 2 for retail) and the price (apply at cut-off for best allotment chances).
ā¢ Submit ā the amount gets blocked in your account until allotment.
Method 2 ā Via UPI through a Stock Broker:
ā¢ Log in to your broker's app (Zerodha, Groww, Upstox, Angel One, etc.).
ā¢ Find the IPO section and select Recode Studios.
ā¢ Enter lots and price, then provide your UPI ID.
ā¢ Approve the payment mandate that arrives in your UPI app (PhonePe, Google Pay, BHIM etc.).
ā¢ Mandate must be approved before 5:00 PM on May 7, 2026 (last day).
You need: a Demat account, a bank account linked to ASBA or a UPI handle, and a PAN card registered with your Demat.
9. IPO Allocation ā Who Gets How Much?
IPO shares are divided across different investor categories. Here is how the Recode Studios IPO is structured:
ā¢ QIB (Qualified Institutional Buyers ā mutual funds, FIIs, insurance companies): 50% of the issue ā 13,36,800 shares
ā¢ NII / HNI (Non-Institutional Investors ā applying above Rs. 2 lakh): 14.29% of the issue ā 4,03,200 shares
ā¢ Retail Individual Investors (RII): 33.22% of the issue ā 9,37,600 shares
In an SME IPO, if a category is oversubscribed, allotment is done by lottery draw (not proportional reduction like mainboard IPOs). This means even heavily oversubscribed SME IPOs can result in full allotment for some and zero for others.
Disclaimer:
This is written for educational and informational purposes only. Nothing here constitutes investment advice or a recommendation to buy or sell securities. All data is sourced from publicly available information. Investments in securities markets are subject to market risks ā please read all offer documents carefully before investing.
