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Oswal Pumps IPO to open for subscription today; GMP at 11%: Should you bid?

Oswal Pumps IPO to open for subscription today; GMP at 11%: Should you bid?

Economic Times13-06-2025
Oswal Pumps, one of India's fastest-growing solar pump manufacturers, will open its Rs 1,387 crore IPO for public subscription on June 13. The issue will close on June 17. The price band for the IPO is fixed at Rs 584–614 per share, and investors can bid for a minimum of 24 shares and in multiples thereafter.
ADVERTISEMENT The IPO comprises a fresh issue of shares worth Rs 890 crore and an offer for sale of 81 lakh shares by promoter Vivek Gupta. The company raised Rs 416 crore from anchor investors on June 12 by allocating 67.78 lakh shares at Rs 614 apiece to marquee institutions like Societe Generale, Smallcap World Fund, ICICI Prudential.
The grey market premium (GMP) for Oswal Pumps stood at Rs 68. With a cap price of Rs 614, the estimated listing price is around Rs 682, implying a listing gain of about 11%.
Founded in 2000, Oswal Pumps manufactures solar-powered and grid-connected submersible and monoblock pumps, electric motors, and solar modules. It has grown rapidly under government schemes such as the PM Kusum Yojana, under which it accounted for around 38% of India's installed solar pumps as of December 2024.Oswal operates a large single-site pump facility in Karnal, Haryana, with vertically integrated manufacturing capabilities. It also sells through 925 distributors across India and launched its own retail outlets — 'Oswal Shopee' — which numbered 248 as of June 2025.
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The company posted strong financials with revenue increasing from Rs 360 crore in FY22 to Rs 759 crore in FY24, while PAT jumped from Rs 17 crore to Rs 98 crore. For the nine months ended December 2024, it reported a revenue of Rs 1,066 crore and net profit of Rs 217 crore, with an EBITDA margin of 30.1% and PAT margin of 20.3%.
ADVERTISEMENT At the upper band, the post-issue P/E is 24.2x, and EV/EBITDA is 15.1x — reasonable compared to listed peers like Shakti Pumps, KSB and Kirloskar Brothers, especially given Oswal's superior return ratios (RoE of 72.6% and RoCE of 56%).SBI Securities recommend subscribing to the IPO for a long-term horizon, citing strong revenue and profit growth, robust order book (Rs 1,100 crore), and leadership in solar pump installations. However, risks include dependence on government schemes and a high receivables cycle (140–150 days).
ADVERTISEMENT "Subscribe for long-term due to strong fundamentals, dominant market share under PM Kusum, and efficient cost structures," it said.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
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