Oswal Pumps Gears Up for ₹1,000 Crore IPO: Files DRHP with SEBI, Fresh Issue and Promoter Stake Sale

Haryana-based Oswal Pumps has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on September 17, to raise ₹1,000 crore through an Initial Public Offering (IPO). The IPO will include a fresh issue of shares worth ₹1,000 crore and an offer-for-sale of 1.13 crore shares by promoter Vivek Gupta.

Financial Performance

Oswal Pumps has shown rapid growth in the past year. In FY24, the cost of materials increased significantly to ₹5,118.31 million, compared to ₹2,478.29 million in FY23. This made up 81.07% of the company’s total expenses, up from 72.70% the previous year.

Employee Retention

The company has also improved employee retention. As of March 31, 2024, Oswal Pumps had 1,851 employees, and the attrition rate (employees leaving the company) dropped to 33.2%, compared to 46.67% in FY23 and 62.95% in FY22.

Business Overview

Oswal Pumps is known for making solar-powered and grid-connected submersible and monoblock pumps, as well as electric motors under the Oswal brand. The company has completed 26,270 solar pumping projects across states like Haryana, Rajasthan, Uttar Pradesh, and Maharashtra under the PM Kusum Scheme.

The money raised from the IPO will be used for setting up new manufacturing facilities in Karnal, Haryana, as well as for repaying debt and other corporate purposes.

Market Position and Growth

Oswal Pumps operates in a competitive industry alongside companies like Kirloskar Brothers, Shakti Pumps, WPIL, KSB, and Roto Pumps. Despite this, the company posted strong financial results, with profits rising 186% to ₹97.7 crore in FY24. Revenue from operations almost doubled to ₹758.6 crore, while EBITDA (earnings before interest, tax, depreciation, and amortization) surged by 160% to ₹150.1 crore, with margins growing to 19.8%.

The IPO will be managed by IIFL Securities, Axis Capital, CLSA India, JM Financial, and Nuvama Wealth Management.