Step 1: Identify the sentences.
First sentence: Mahesh bought a watch.
Second sentence: The watch gives correct time.
Step 2: Combine the sentences into a complex sentence.
In complex sentences, we can use a relative pronoun or subordinating conjunction to combine the two sentences. Here, we use "which" to combine the two clauses.
Complex sentence: Mahesh bought a watch which gives correct time.
Final Answer: \[ \boxed{\text{Mahesh bought a watch which gives correct time.}} \]