Mumbai, June 13, 2025 — Oswal Pumps Ltd. has opened its highly anticipated maiden public offering, bringing a sharp spotlight on its strategy, market reception, and the notable surge in its grey market premium (GMP). Valued at ₹1,387 crore, the IPO has triggered strong speculation and interest—rendering a nuanced corporate narrative in renewable-energy financing.
1. IPO Details and Structure
Oswal Pumps, headquartered in Karnal and known for its solar- and grid-based pumping systems, launched its IPO on June 13, concluding on June 17, 2025. The offering combines a fresh equity issue of ₹890 crore with an offer-for-sale (OFS) of ~81 lakh shares, targeting total proceeds of ₹1,387.34 crore
Price band: ₹584 – ₹614 per share
Lot size: Minimum of 24 shares, in multiples thereafter
Anchor round: Held on June 12, with 67.78 lakh equity shares allotted at ₹614 to marquee investors such as Societe Generale, ICICI Prudential MF, BNP Paribas, Kotak MF, and Smallcap World Fund, cumulatively raising ₹416.2 crore .
Post-IPO promoter stake: Expected to reduce from 100% to approximately 80% .
2. Company Profile & Financial Health
Founded in 2003, Oswal Pumps specializes in solar pumps, monoblock and submersible pumps, electric motors, and solar modules under the “Oswal” brand. Its flagship plant in Karnal supports extensive vertical integration—from casting and motor winding to full system assembly
Financial Highlights:
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Revenue (FY22–FY24): Rose from ₹360 crore to ₹759 crore, marking a ~45% CAGR
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Net profit (FY22–FY24): Jumped from ₹17 crore to ₹98 crore. Nine-month FY25 numbers show revenue of ₹1,066 crore and profit of ₹217 crore
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Debt: Net debt surged from ₹83 crore to ₹531.5 crore, prompting capital mobilization via IPO
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Working capital constraints: Cycle extended from 71 to 142 days, and exports dropped to 3.7% of revenue
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Revenue concentration: 87% of nine-month FY25 revenue rooted in the PM-KUSUM solar pump scheme, compared to 55% in FY22
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Margins: EBITDA margin at ~30%, PAT margin ~20% for nine-month FY25 .
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Valuation (at upper price band): P/E ~24×, EV/EBITDA ~15×; strong return ratios with RoE 72.6% and RoCE 56%
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Orderbook: Stands at ₹1,100 crore with additional bids of ₹3,200 crore—providing solid visibility
3. Grey Market Premium: Surge & Volatility
The grey market allows informal share trading before official listing. Oswal Pumps’ GMP has surged aggressively:
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June 11: ₹67–68
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June 12: Leapt to ₹80–83 (~13%)
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June 13 (morning): Around ₹68–71—predicting a listing at ~₹682–685 (~11%)
This volatility underscores both high investor interest and changing sentiment based on appetite, price dynamics, and peer marketplace activity.
4. Day-1 Subscription Status
Subscription progression on June 13 has been moderate:
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Overall subscription: ~6% by midday
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Segment breakdown: Retail ~7–9%, NIIs ~9%, QIBs slow initially with virtually no bids until mid-day
The steady but unspectacular start may reflect investors’ caution given sector concentration and working capital risk. Yet, with time till June 17, analysts suggest momentum may build.
5. Analyst Reviews & Market Sentiment
Brokerage sentiment leans positive but balanced with caution:
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SBI Securities and BP Equities recommend long-term subscription based on strong fundamentals
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Canara Bank Securities holds a “Neutral” stance, highlighting rich valuation (P/E ~63× vs industry ~52×) and dependency on government schemes
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Anand Rathi, Arihant Capital, GEPL, and SMIFS suggest “Subscribe” based on growth potential, backward integration, expanding network, healthy orderbook, and scalability
6. Risks and Mitigations
While the IPO has potential, investors should weigh certain risks:
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Government dependency: Heavy reliance on the PM-KUSUM scheme means policy delays or changes could impact earnings and cash flow continuity.
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Liquidity stress: Expanding working capital cycles heighten short-term cash needs—partly why IPO debt repayment is critical.
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Valuation: At upper band, P/E multiples exceed peers; any slowdown in growth may trigger revaluations.
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Export contraction: Reduced foreign sales highlight vulnerability to domestic policy shifts; diversification needed.
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Debt load: Even with planned repayments, net debt strain continues.
However, mitigants include a massive orderbook, strong margins, robust institutional anchor participation, and integrated operations across solar and pumping systems.
7. Strategic Outlook
Growth Strategy
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Backward integration: Developing own solar module manufacturing enhances margin control and supply chain resilience
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Retail expansion: ‘Oswal Shopee’ stores and 925 distributors strengthen brand outreach
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Product diversification: Entrance into electric motors, cables, and inverter systems broadens future revenue streams
Funding Application
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Capex and subsidiary investment: Part of IPO proceeds will fund manufacturing expansion geared toward solar module capability via Oswal Solar
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Debt reduction: Financial realignment will ease interest burden and improve capital structure .
Market Positioning
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Leading solar pump supplier with ~38% market share as of Dec 2024 under PM-KUSUM .
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High-return ratios signal attractive capital efficiency (RoE ~72.6%).
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Financial discipline evident with improved interest cover (from 4.6× to 11.2×)
8. Listing Expectations and Secondary Market Outlook
With listing expected June 20 on NSE and BSE, investors are watching for GMP-driven opening gains. Grey-market consensus calculates an 11–13% premium above IPO upper price—suggesting an INR 682–690 debut.
Short-term outlook: High premium could attract momentum-driven short-term traders, though volatility is expected post-listing, especially if broader market shifts.
Long-term outlook: Strong governance, growth, and integration point to mid-to-long-term upside, albeit tempered by sector and policy exposure.
9. Verdict for Investors
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Retail investors: For those with long holding horizons, the IPO offers exposure to the booming solar-agri sector and returns potential.
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Risk-conscious subscribers: Should monitor valuation, execution, and policy stability before taking aggressive positions.
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Institutional investors: Current QIB interest is muted, but anchor activity and spectator sentiment may draw uptake later in the window.
10. Final Take
Oswal Pumps’ IPO signals a strategic growth thrust leveraging solar energy momentum. With strong financials, seasoned anchor investors, and hefty grey market premiums, appetite is high. However, policy dependence, valuation premium, and capital dynamics inject caution.
Threading this needle—between bullish growth narrative and measured vigilance—will define subscription and listing outcomes. The next few days will determine whether GMP momentum sustains, execution stays on track, and whether long-term value creation justifies current pricing.
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