Oswal Pumps IPO: Should You Subscribe?
Get a detailed overview of Oswal Pumps Ltd’s IPO, including Financial Analysis, Key Strengths, GMP, Risk Factors and Expert Verdict.
Integrated solar pump manufacturer Oswal Pumps Ltd (OPL) launched its initial public offering (IPO) on June 13, 2025, with bidding closing on June 17, 2025. Ahead of the opening, the grey market premium (GMP) climbed to Rs 70, reflecting a 11% premium.
However, investors are advised to carefully consider both the opportunities and risks before subscribing. For a detailed review, see our comprehensive IPO analysis here.
Oswal Pumps IPO Details
- Issue Details: Mainstream
- Issue Size: Rs 1,387.34 crore
- Fresh Issue: Rs 890 crore
- Offer for Sale: Rs 497.34 crore
- Price Band: Rs 584 – Rs 614
- Lot Size: 24 shares
- Listing Date: June 20, 2025
Overview of Oswal Pumps Ltd
OPL manufactures a range of products, including solar-powered and grid-connected submersible and monoblock pumps, electric motors (induction and submersible) and solar modules, all sold under the ‘Oswal’ brand. Its diverse product portfolio caters to the agricultural, residential and industrial sectors.
The company operates two manufacturing facilities in Karnal, Haryana, with an annual installed capacity of 1,160.07 MT for stainless steel pumps, 2,366.04 MT for cast iron pumps, 1,314.72 MT for stainless steel motors and 561.60 MT for cast iron motors as of December 31, 2024.
Oswal Pumps Key Strengths
- Impressive Growth: OPL stands as the fastest-growing vertically integrated solar pump manufacturer in India, delivering a strong CAGR of 45% in operational revenue, 97% in EBITDA, and 140% in net profit from FY22 to FY24.
- Exceptional Return Metrics: OPL exhibits robust operational efficiency, boasting an outstanding Return on Net Worth (RoNW) of 88.73% and Return on Capital Employed (RoCE) of 81.85% in FY24, significantly outperforming its listed peers.
- Rising Profit Margins: OPL has consistently strengthened its profitability, with EBITDA margins growing from 10.69% in FY22 to 19.79% in FY24. Net profit margins have also risen from 4.69% to 12.83%, reaching 20.30% in 9MFY25.
- Strategic Market Presence: OPL holds a dominant position in North India, particularly in major agricultural states such as Haryana. The firm also has a growing footprint in regions including Maharashtra, Uttar Pradesh, Rajasthan, Chhattisgarh and Punjab. Additionally, OPL operates through an extensive network of 925 distributors across India.
Oswal Pumps Risk Factors
- Dependence on Government Schemes: A significant portion of OPL's revenue is derived from the supply of Turnkey Solar Pumping Systems under the PM Kusum Scheme, awarded through tenders by state and central government institutions. Any reduction in government funding for this scheme or the inability to secure contracts could negatively impact the business and operational results.
- Client Concentration: As of December 31, 2024, around 79% of OPL's revenue comes from its top 10 customers. A decline in business from these key clients could adversely affect the company’s operations and financial performance.
- Subsidiary Losses: OPL's subsidiaries, Oswal Solar and Oswal Green, have incurred losses in the past and may continue to do so in the future. Such losses could negatively affect the overall business and results.
- Trade Receivables & Liabilities: As of December 31, 2024, OPL has significant trade receivables of Rs 711.11 crore and financial liabilities of Rs 190.1 crore. Inability to efficiently manage these receivables and liabilities could negatively impact the company's business, financial health and overall performance.
Final Thoughts: Should You Subscribe to Oswal Pumps’ IPO?
OPL has demonstrated robust financial growth in recent years, backed by industry-leading return ratios and profitability margins. FY25E growth also looks promising based on annualized figures.
From a valuation standpoint, the IPO commands a P/E multiple of 21x based on 9MFY25 annualized earnings. However, using FY24 EPS, the P/E multiple stands at 62.5x, indicating a more aggressive pricing.
Nevertheless, OPL’s long-term growth potential remains strong. The Indian solar pump market was valued at Rs 164.5 billion in FY25 and is expected to grow at a CAGR of 11% through FY30, reaching Rs 271.1 billion. With a strong brand presence in the solar pump sector, diversified product offerings and integrated manufacturing capabilities, OPL is well-positioned to capitalize on these growth drivers.
Additionally, as a key supplier of solar-powered agricultural pumps under the PM Kusum Scheme, OPL stands to benefit from favourable industry trends. Given these factors, the IPO is well-suited for investors with a medium-to-long-term investment horizon.
For a deep dive into other IPOs, explore: IPO Corner on Liquide