Oswal Pumps Limited, a Karnal-based leader in India’s solar and grid-connected pump manufacturing, has rolled out its Initial Public Offering (IPO) from June 13 to June 17, 2025, aiming to raise ₹1,387.34 crore. With a price band of ₹584 to ₹614 per share and a lot size of 24 shares, the IPO has already attracted significant interest, securing ₹416.2 crore from anchor investors like ICICI Prudential and Kotak Mahindra. But is this IPO a must-have for investors, or does it come with pitfalls? Let’s break it down to help you decide.
About Oswal Pumps
Established in 2003, Oswal Pumps has grown from producing monoblock pumps to becoming a key player in India’s solar pump market. The company manufactures solar-powered and grid-connected submersible pumps, electric motors, solar modules, and turnkey solar pumping systems under the ‘Oswal’ brand. It serves agricultural, residential, commercial, and industrial sectors, riding the wave of India’s renewable energy push, particularly through the PM-KUSUM Scheme.
As of December 2024, Oswal holds a 38% share of solar pump installations under PM-KUSUM, having supplied 1.45 lakh solar pumps and executed over 38,000 turnkey systems. Its 41,076-square-meter manufacturing facility in Karnal, Haryana, supports a vertically integrated model, producing critical components in-house. The company’s distribution network has expanded from 473 distributors in March 2022 to 925 by December 2024, including 248 exclusive ‘Oswal Shoppe’ retail stores.
IPO Breakdown
The IPO includes a fresh issue of 1.45 crore equity shares worth ₹890 crore and an offer for sale (OFS) of 81 lakh shares by promoter Vivek Gupta, valued at ₹497.34 crore. It follows a book-building process, with 50% allocated to Qualified Institutional Buyers (QIBs), 15% to Non-Institutional Investors (NIIs), and 35% to retail investors. Retail investors need a minimum of ₹14,016 (24 shares at ₹584), while small NIIs require ₹2,06,304 (336 shares) and big NIIs need ₹10,02,048 (1,632 shares). The shares are expected to list on BSE and NSE on June 20, 2025, with allotment by June 18.
The fresh issue proceeds will fund:
- ₹89.86 crore for expanding manufacturing capacity.
- ₹419.16 crore for new manufacturing units in Karnal via subsidiary Oswal Solar, plus ₹26 crore for its debt repayment.
- ₹235 crore to reduce company debt.
- General corporate needs, including working capital.
Financial Highlights
Oswal Pumps has delivered impressive financial growth, making it a standout in the sector. Its revenue grew at a 45% compound annual growth rate (CAGR) from FY22 to FY24, outpacing competitors. Key figures include:
| Metric | FY 2022 | FY 2023 | FY 2024 | Growth (FY22-24) |
|---|---|---|---|---|
| Revenue (₹ crore) | 360 | 385 | 7,586 | 20x |
| Profit (₹ crore) | 17 | 34 | 977 | 57x |
| Debt (₹ crore) | 875 | 593 | 754 | Reduced 14% |
| Operating EBITDA Margin | N/A | N/A | Not Disclosed | – |
- FY23: Revenue of ₹387.47 crore, Profit After Tax (PAT) of ₹34.2 crore.
- FY24: Revenue jumped 96% to ₹761.23 crore, PAT rose 185% to ₹97.67 crore.
- 9M FY25: Revenue hit ₹1,066 crore, with PAT at ₹216.7 crore, boasting an EBITDA margin of 30% and PAT margin of 20%.
The company’s return on equity (RoE) is 72.6%, and return on capital employed (RoCE) is 56%, both strong compared to peers. At ₹614, the post-issue price-to-earnings (P/E) ratio is 24.2x, and enterprise value-to-EBITDA (EV/EBITDA) is 15.1x, appearing reasonable against competitors like Shakti Pumps (P/E: 66.7), KSB Ltd (P/E: 66.8), and Kirloskar Brothers (P/E: 41.9).
Grey Market Buzz
The grey market premium (GMP) for Oswal Pumps has fluctuated but signals optimism. As of June 13, 2025, the GMP ranged from ₹71 to ₹95, suggesting a listing price of ₹685 to ₹709 per share—a potential gain of 11-15% over ₹614. While GMP reflects market enthusiasm, it’s speculative and not a guaranteed predictor of listing performance.
Why Consider Investing?
- Solar Pump Dominance: Oswal leads PM-KUSUM with a 43.8% share of installations as of March 2024, aligning with India’s ₹34,400 crore clean energy push.
- Strong Financials: High revenue growth, robust margins (EBITDA: 30%, PAT: 20%), and superior RoE/RoCE make it a solid bet.
- In-House Manufacturing: Producing components like pumps and solar modules internally boosts margins and quality control.
- Growing Reach: A network of 925 distributors and 248 Oswal Shoppes ensures strong market penetration, especially in agriculture-heavy states.
- Export Ambitions: Already exporting to 22 countries, Oswal aims to reach 50, tapping global demand for affordable pumps.
- Anchor Confidence: ₹416.2 crore from top investors like Aditya Birla Sun Life and Quant MF signals trust in its growth.
Risks to Watch
- Government Scheme Reliance: Over 85% of FY24 revenue came from PM-KUSUM, rising to 87% in 9M FY25. Policy shifts could hurt earnings.
- Regional Focus: Operations are concentrated in Haryana, exposing the company to local risks like weather or political disruptions.
- Customer Dependence: Heavy reliance on the top 10 customers could impact cash flows if relationships sour.
- Debt Burden: Standalone debt stood at ₹308.57 crore as of April 2025. Though IPO funds will reduce this, leverage remains a concern.
- Expansion Challenges: New manufacturing units, including ethylene-vinyl acetate production, face risks of delays or cost overruns, especially given no prior experience in this area.
- Market Swings: GMP volatility and broader market conditions could affect listing gains.
Should You Apply?
Oswal Pumps’ IPO is an exciting opportunity to invest in India’s renewable energy and agriculture sectors. Its market leadership, strong financial growth, and reasonable valuation (P/E: 24.2x) make it appealing for long-term investors. The company’s alignment with government initiatives and export potential adds to its allure.
However, risks such as dependence on government schemes, regional concentration, and high debt levels call for caution. The GMP suggests an 11-15% listing pop, but short-term gains aren’t guaranteed. Analysts recommend subscribing for long-term potential, but conservative investors may want to review the Red Herring Prospectus (RHP) and track subscription trends (42% on Day 1, with retail at 45% and NII at 79%) before deciding.
Verdict: If you’re comfortable with some risk and bullish on India’s clean energy future, Oswal Pumps IPO is worth considering for medium- to long-term gains. Risk-averse investors should study the RHP and consider waiting for listing performance. Apply by June 17, 2025, via platforms like 5paisa or IIFL Securities, and check allotment on June 18 through MUFG Intime India or BSE/NSE websites.
Note: IPO investments involve risks. Review the RHP and consult a financial advisor before applying. GMP is not a reliable indicator of listing outcomes.
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