Overview of Oswal Pumps IPO
Oswal Pumps, a Haryana-based company specializing in solar pumping solutions, is set to enter the public market by raising funds through an Initial Public Offering (IPO). On September 17th, the company filed its draft papers with the Securities and Exchange Board of India (SEBI). This IPO consists of both fresh equity shares and an Offer for Sale (OFS), where the company aims to raise Rs. 1000 crore through newly issued shares. Additionally, approximately 1.13 crore equity shares will be offered by promoter Vivek Gupta through the OFS.
Utilization of Funds
The funds raised from the IPO will be instrumental for Oswal Pumps in several key areas:
- **Capital Expenditure**: To enhance operational capacity and expand product offerings.
- **New Manufacturing Units**: The company is planning to establish new manufacturing facilities in Karnal, Haryana, to boost production capabilities.
- **Debt Repayment**: A portion of the funds will be dedicated to repaying existing debts, helping to strengthen the company’s financial position.
- **General Corporate Purposes**: Remaining funds will be utilized for various corporate needs, ensuring smooth operational continuity.
The IPO is being managed by leading financial entities including IIFL Securities, Axis Capital, CLSA India, JM Financial, and Nuvama Wealth Management, ensuring a robust underwriting process.
Business Model of Oswal Pumps
Oswal Pumps specializes in manufacturing a variety of solar-powered and grid-connected pumping systems, including submersible and monoblock pumps as well as electric motors marketed under the Oswal brand. The company has successfully executed around 26,270 turnkey solar pumping systems under the PM Kusum scheme across various Indian states including Haryana, Rajasthan, Uttar Pradesh, and Maharashtra.
Market Competition
In the competitive landscape, Oswal Pumps faces challenges from established firms like Kirloskar Brothers, Shakti Pumps, WPIL, KSB, and Roto Pumps. The company distinguishes itself through its commitment to quality and innovative solar solutions, which are increasingly in demand as the agricultural sector pivots towards sustainable practices.
Financial Performance
Oswal Pumps has demonstrated remarkable financial growth recently. For the fiscal year 2024 (FY24), the company’s profit surged by 186 percent to Rs. 97.7 crore compared to the previous year, supported by strong revenue generation and efficient operational management. Total revenue experienced an impressive increase of 97 percent, reaching Rs. 758.6 crore. Furthermore, the company’s EBITDA rose by 160 percent to Rs. 150.1 crore, with margins expanding by 480 basis points to 19.8 percent compared to FY23.
Conclusion
With a robust business model, impressive financial metrics, and strategic plans for expansion, Oswal Pumps is positioned for significant growth in the renewable energy sector. The upcoming IPO presents a valuable opportunity for investors to engage with a company making strides in sustainable technology, aligning with broader environmental goals.
