Oswal Pumps IPO Day 1 Live: Issue subscribed 42% so far. Check GMP, issue details. Should you apply or not?

Oswal Pumps IPO: The initial public offering (IPO) of Oswal Pumps Ltd has began today (Friday, June 13) and will close on Tuesday, June 17. On Thursday, it raised ₹416.2 crore from anchor investors just a day before its share sale opened to the public for subscriptions.

Among the anchor investors are ICICI Prudential Mutual Fund (MF), Kotak Mahindra MF, Aditya Birla Sun Life MF, Quant MF, Societe Generale, Edelweiss Life Insurance, BNP Paribas, the Paris-based asset manager Amundi, and the financial services firm Capital Group, as per a circular posted on BSE's website.

Oswal Pumps IPO price band has been set between ₹584 and ₹614 per share for its total initial public offering of ₹1,387 crore. Investors can place bids for a minimum of 24 equity shares and in multiples of 24 shares thereafter.

The offering will be conducted via the book-building method, where a maximum of 50% of the net offer will be reserved for qualified institutional buyers on a proportionate basis, at least 15% will be allocated to non-institutional bidders, and a minimum of 35% will be set aside for retail individual bidders.

Oswal Pumps started its operations in 2003 by producing low-speed monoblock pumps and has since expanded its production to include grid-connected submersible pumps and electric motors.

The company manufactures solar-powered and grid-connected submersible and monoblock pumps, as well as electric motors, including induction and submersible motors, along with solar modules, and sells these products under the 'Oswal' brand.

In FY24, Oswal Pumps' revenue from operations surged by 97% to ₹758.6 crore, up from ₹385 crore in the previous year, while profit climbed to ₹97.66 crore from ₹34.20 crore.

Oswal Pumps IPO Day 1 Live: All you need to know about Promoters

Vivek Gupta, Amulya Gupta, Shivam Gupta, Shorya Trading Company Private Limited, Ess Aar Corporate Services Private Limited, and Singh Engcon Private Limited serve as the Promoters of their company. Together, the promoters possess a total of 97,155,300 equity shares, which constitute 97.66% of the pre-Offer issued, subscribed, and paid-up share capital of their company, based on a fully diluted basis.

Oswal Pumps IPO Day 1 Live: Subscription Status

Oswal Pumps IPO subscription status is 42% as of close on day 1. The retail portion was subscribed 45%, and NII portion was booked 79%. Qualified Institutional Buyers (QIBs) portion received 8% bids.

The company has received bids for 67,83,552 shares against 1,62,12,980 shares on offer, according to data on BSE.

Oswal Pumps IPO Day 1 Live: IPO details

The IPO includes a new issuance of equity shares worth ₹890 crore and a sale of up to 8.1 million shares by one of the company's promoters, Vivek Gupta, who currently holds a 25.17 percent stake in the firm.

Oswal Pumps IPO Day 1 Live: Key dates

Oswal Pumps IPO Day 1 Live: Peer comparison

According to the red herring prospectus (RHP), the company's publicly listed competitors include Kirloskar Brothers Ltd (with a P/E of 41.94), Shakti Pumps (India) Ltd (with a P/E of 66.72), WPIL Ltd (with a P/E of 27.31), KSB Ltd (with a P/E of 66.79), and Roto Pumps Ltd (with a P/E of 42.08).

Oswal Pumps IPO Day 1 Live: Oswal Pumps IPO Subscription Status

Oswal Pumps IPO subscription status is 3%, on day 1, so far. The retail portion was subscribed 3%, and NII portion was booked 7%. Qualified Institutional Buyers (QIBs) portion is yet to be booked.

The company has received bids for 4,93,800 shares against 1,62,12,980 shares on offer, at 10:12 IST, according to data on chittorgarh.com

Oswal Pumps IPO Day 1 Live: Canara Bank Securities has a ‘Neutral’ stance

"Valuation remains a concern, with the IPO pricing at 63x PE, exceeding the sector average of 52x PE, and 38x PB, significantly higher than peers at 9x PB. Revenue concentration poses a risk, with 85.72% of FY24 revenue linked to the PM KUSUM scheme, leading to prolonged receivable cycles, receivables stood at 66.73% of revenue in 9M FY25.

Given dependency on government orders and stretched working capital, we give a NEUTRAL rating, advising long-term investors to assess risk-reward dynamics before participation," said the brokerage.

Oswal Pumps IPO Subscription Status

Subscription for the public issue will open at 10:00 IST during Friday's deals.

Oswal Pumps IPO Review

As per BP Equities, the company has notably decreased its debt-to-equity (D/E) ratio from 2.1x in FY22 to 0.4x in FY24, while the ratio for 9MFY25 is at 0.9x. The rise in debt was primarily attributed to a significant increase in short-term financing.

Nevertheless, despite the debt increase, financial comfort remains intact, as evidenced by a robust growth in its interest coverage ratio, which improved from 4.6x to 11.2x between FY22 and 9MFY25.

The valuation of the issue stands at a price-to-earnings (P/E) ratio of 21.2x at the upper price band based on FY25 earnings (annualized), making it relatively more affordable compared to its competitors. Taking all these compelling aspects into account, they suggest a "SUBSCRIBE" recommendation for this issue.

SBICAP Securities noted that the firm has an order book amounting to ₹1,100 crore, which is approximately 0.8 times its annualized revenue for 9MFY25, along with an extra bidding pipeline of around ₹3,200 crore that suggests good growth potential.

However, a challenge for the business is its reliance on government contracts and potential delays in cash flow. The brokerage has advised investors to SUBSCRIBE to the issue for a long-term investment perspective.

Oswal Pumps IPO GMP today

Oswal Pumps IPO GMP today is +71. This indicates Oswal Pumps share price was trading at a premium of ₹71 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Oswal Pumps share price is indicated at ₹685 apiece, which is 11.56% higher than the IPO price of ₹614.

According to the recent seven sessions of grey market activity, the current IPO GMP is showing an upward trend and is anticipated to have a robust listing. The minimum GMP is ₹0.00, and the maximum GMP is ₹88, as noted by experts from investorgain.com.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.