Upcoming IPO: Haryana-based Oswal Pumps files DRHP with SEBI to raise ₹1,000 crore via fresh issue

Upcoming mainboard IPO: Haryana-based Oswal Pumps submitted a draft red herring prospectus to the Securities and Exchange Board of India (SEBI) on September 17, seeking approval to raise funds through an initial public offering (IPO).

The IPO will comprise a fresh equity issue worth ₹1,000 crore, alongside an offer-for-sale of 1.13 crore equity shares by the company's promoter, Vivek Gupta.

Financial overview

In fiscal 2024, Oswal Pumps reported a significant surge in material costs, reflecting the company’s rapid growth. Key financial data from the company shows that the cost of materials consumed reached ₹5,118.31 million in FY24, up from ₹2,478.29 million in FY23. This represented 81.07% of the total expenses, compared to 72.70% in the previous year.

Employee attrition

The company's draft prospectus also highlights a declining employee attrition rate over the past few years. As of March 31, 2024, Oswal Pumps had 1,851 employees, with an attrition rate of 33.2%, a marked improvement from the 46.67% in FY23 and 62.95% in FY22.

Business focus

Oswal Pumps is known for manufacturing solar-powered and grid-connected submersible and monoblock pumps, and electric motors, all sold under the Oswal brand. The company has executed orders for 26,270 turnkey solar pumping systems under the PM Kusum Scheme across multiple states, including Haryana, Rajasthan, Uttar Pradesh, and Maharashtra.

Proceeds will finance capital expenditures and new manufacturing facilities in Karnal, Haryana. The funds will also be allocated to debt repayment and general corporate purposes.

Oswal Pumps peers and financial growth

Oswal Pumps operates in a competitive market, with peers such as Kirloskar Brothers, Shakti Pumps, WPIL, KSB, and Roto Pumps. Despite the competition, the company posted strong financial results, with profits rising by 186% to ₹97.7 crore in FY24, driven by a robust topline and operational performance. Revenue from operations nearly doubled, increasing by 97% to ₹758.6 crore.

EBITDA for FY24 surged by 160% to ₹150.1 crore, with margins expanding by 480 basis points to 19.8%.

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