Oswal Pumps IPO Details
- Issue Size: ₹1,387.3 Cr total – ₹890 Cr fresh issue + ₹497 Cr offer-for-sale
- Price Band: ₹584–₹614 per share
- Lot Size: Minimum 24 shares (₹14,736 at upper band)
- Anchor Investors: ₹416.2 Cr allocated at ₹614, signaling strong endorsement
- Subscription Start/End: June 13 – 17, 2025
Company Overview
- Founded in 2003, Oswal Pumps is headquartered in Karnal, Haryana, with a vertically integrated manufacturing campus spanning 41,000–45,000 m² along NH-1.
- The company designs, manufactures, and markets a wide portfolio, including solar-powered pumps, submersible and monoblock pumps, pressure and sewage pumps, electric motors, winding wires, cables, and control panels.
- Oswal has its in‑house facilities for casting, die‑casting, CNC machining, wire winding, injection molding, stamping, bearing production, and cable manufacturing—a testament to their full vertical integration
- Established a vast distributor network: 2,000+ dealers across India, and 636 distributors reported for FY 2024.
- Key domestic markets: Haryana, Uttar Pradesh, Rajasthan, Maharashtra; exports across Asia Pacific, Middle East, and Africa.
- Strong position in the solar pump segment, supplying over 26,000–38,000 turnkey solar pumping systems under the government’s PM‑KUSUM initiative
Business Strengths
- Sector Leadership: A leading player in solar pumps under PM-KUSUM, with over 26k turnkey systems delivered
- Financial Growth (FY24 vs FY23):
- Revenue nearly doubled to ₹758.6 Cr (+97%)
- PAT soared 186% to ₹97.7 Cr
- EBITDA grew 160% to ₹150.1 Cr, margin at ~19.8% (+480 bps)
- Vertical Integration: Manufactures core components and solar modules, improving margins and control
- Distribution Reach: Network of 636 distributors across key states — Haryana, Maharashtra, UP, Rajasthan
Risks & Weaknesses
- Govt-dependent contracts: Heavy reliance (60 %+) on PM-KUSUM scheme tenders. Reduced subsidies or tender wins could impact revenue
- Geographic concentration: 72% revenue from Haryana alone, exposing it to regional risk.
- Client concentration: Top 5 clients contribute 68% of revenues.
- Raw material volatility: Costs rising — copper & solar cells could squeeze margins if commodity prices spike.
- Execution & capacity risk: Expansion from 400 MW to 3,000 MW, but success depends on execution.
- Manufacturing centralization: Two facilities in Karnal — any disruption could impact the entire operation
Financial Snapshot
| Particulars | FY21 (Cr) | FY22 (Cr) | FY23 (Cr) | FY24 (Cr) |
|---|---|---|---|---|
| Revenue from Operations | 222.21 | 263.48 | 384.88 | 758.63 |
| Total Income | 228.61 | 267.18 | 392.64 | 763.75 |
| EBITDA | 25.36 | 30.56 | 57.74 | 150.12 |
| EBITDA Margin (%) | 11.4% | 11.6% | 15.0% | 19.8% |
| Profit After Tax (PAT) | 13.79 | 14.31 | 34.18 | 97.75 |
| PAT Margin (%) | 6.0% | 5.4% | 8.9% | 12.9% |
| Net Worth | 85.01 | 99.24 | 129.42 | 227.18 |
| Total Borrowings | 58.92 | 66.43 | 59.54 | 75.54 |
| Return on Net Worth (RoNW) | 16.2% | 14.4% | 26.4% | 43.0% |
| EPS (Basic/Diluted) ₹ | 3.09 | 3.20 | 7.63 | 20.21 |
| Cash Flow from Ops (CFO) | 18.2 | -7.3 | -10.5 | 68.1 |
Key Financial Ratios (FY24)
-
Debt to Equity: 0.33x
- Low gearing: With a 0.33 ratio, Oswal Pumps has ₹0.33 in debt for every ₹1 of equity.
- Indicates the company is not overly reliant on borrowed funds, which is a good sign.
- Gives the company more flexibility to raise debt in the future if needed.
- Good sign for investors — low financial risk.
-
Asset Turnover Ratio: 1.48x
- Measures how efficiently the company uses its assets to generate sales.
- 1.48 means the company generated ₹1.48 in revenue for every ₹1 of assets, good operational efficiency.
- Efficient asset utilization.
-
Current Ratio: 1.68
- This means the company has ₹1.68 in current assets for every ₹1 in current liabilities.
- Suggests that Oswal has a healthy short-term liquidity position and can comfortably meet its day-to-day obligations.
- Healthy liquidity — shows operational stability.
-
Interest Coverage Ratio: 5.8x
- The company earns 5.8 times its interest cost, which means it’s easily able to meet interest payments from profits.
- A ratio above 3 is generally considered good.
-
Operating Cash Flow to PAT: 69.6%
- Tells us how much of the reported profit is being translated into actual cash.
- 70% is quite solid, indicating that profits are not just paper-based and are backed by real cash.
Growth Analysis (FY23 vs FY24)
| Metric | FY23 | FY24 | % Growth YoY |
|---|---|---|---|
| Revenue | ₹384.88 Cr | ₹758.63 Cr | ↑ 97% |
| PAT | ₹34.18 Cr | ₹97.75 Cr | ↑ 186% |
| EBITDA | ₹57.74 Cr | ₹150.12 Cr | ↑ 160% |
| RoNW | 26.4% | 43.0% | Strong |
IPO Use of Funds
- Primary fund utilization: Capex (new plant, solar subsidiary), debt repayment, working capital
- Offer-for-sale: Promoter dilution to 80% — provides liquidity but reduces founder stake
Listing Outlook & Conclusion
- Positive indicators: Strong GMP (13%), anchor support, exceptional FY24 growth, and govt sector tailwinds in renewable energy.
- Caution points: Tender dependency, regional exposure, commodity, and execution risks.
Verdict: For short-term gains, the robust GMP suggests potential listing appreciation. For long-term investors, the strengths in vertical integration, market leadership, and financial turnaround are encouraging, provided the company manages risks prudently.
Investment Strategy
- Listing Play: If aiming for listing gains, investing at the upper band may offer 10–15% upside, but allotment may be limited.
- Long-Term Holding: Favorable, if you believe in solar push & Oswal’s capacity to scale, reduce regional dependency, and navigate commodity volatility.
How to Apply Oswal Pumps IPO
| Application Method | Through UPI or ASBA via your broker like Upstox, Zerodha, or bank portal |
|---|---|
| Minimum Investment | ₹14,736 (24 shares at the cut-off price of ₹614) |
| Mandate Approval Deadline | By 5:00 PM on June 17, 2025 |
Conclusion: Should You Invest in Oswal Pumps IPO?
Oswal Pumps Limited presents itself as a well-established player in the pump manufacturing industry with strong vertical integration, quality certifications, and a growing presence in the renewable energy (solar pump) space. Its participation in government schemes like PM-KUSUM has significantly contributed to revenue, and the company enjoys a wide domestic network and growing export footprint.
However, there are some key risks to keep in mind:
- High dependence on government tenders (especially PM-KUSUM)
- Geographical concentration of sales in Northern India
- Stiff competition from larger and more diversified players
- Moderate financials with thin profit margins and relatively high receivables
| Factor | Verdict |
|---|---|
| Business Strength | Good, especially in the solar segment |
| Financial Performance | Average; improving trend but tight margins |
| Valuation (P/E ~15–16) | Reasonable for SME IPO |
| Growth Potential | Positive, with export & renewable energy focus |
| Risk Factors | High exposure to govt schemes and working capital strain |
Final Take:
If you are a moderate to high-risk investor looking for SME IPO exposure and believe in the long-term prospects of infrastructure, water, and solar-related sectors, Oswal Pumps IPO could be a good bet for listing gains and mid-term growth.
However, this is not a low-risk IPO, and conservative investors should wait and watch for performance post-listing before entering.
