Oswal Pumps, a Haryana-based manufacturer of pumps and motors, has filed preliminary papers with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO). The IPO will comprise a fresh issue of equity shares worth ₹1,000 crore along with an offer-for-sale (OFS) of up to 1.13 crore equity shares by promoter Vivek Gupta. Proceeds from the fresh issue will be directed towards capital expenditure, investment in its subsidiary Oswal Solar, setting up new manufacturing units, and debt repayment. The company is also considering a pre-IPO placement of up to ₹200 crore, which could reduce the size of the fresh issue.

IPO Structure: Fresh Issue and Offer-For-Sale

Oswal Pumps’ IPO consists of two components: a fresh equity issue worth ₹1,000 crore and an OFS of up to 1.13 crore shares by its promoter Vivek Gupta. According to the draft red herring prospectus (DRHP) filed on Tuesday, the company is positioning itself to tap the capital markets, enhancing its financial standing and funding its strategic initiatives. Notably, the company may also consider a pre-IPO placement of up to ₹200 crore, which would proportionately reduce the size of the fresh issue, providing flexibility in its capital-raising strategy.

Utilization of IPO Proceeds

The funds raised from the fresh issue will be utilized for multiple strategic objectives, including funding capital expenditures, investing in its wholly-owned subsidiary Oswal Solar, and establishing new manufacturing units in Karnal, Haryana. Additionally, the proceeds will be used for debt repayment and general corporate purposes. This allocation underscores Oswal Pumps’ commitment to expanding its production capabilities and strengthening its market presence in the renewable energy sector through investments in solar technology.

Company’s Growth and Product Portfolio

Established in 2003, Oswal Pumps began its operations with low-speed monoblock pumps and has since expanded its product range to include grid-connected high-speed monoblock pumps, submersible pumps, and electric motors. The company also manufactures solar-powered pumps and motors, serving both traditional and renewable energy markets. Oswal’s diverse product lineup is marketed under the 'Oswal' brand, which is well-recognized for quality and reliability in the Indian market.

Expanding Distribution Network

Oswal Pumps has significantly bolstered its distribution network, growing from 473 distributors as of March 31, 2022, to 636 by the end of the most recent fiscal year. This expansion has been crucial in driving the company’s revenue growth, allowing it to tap into a wider customer base and enhance its market penetration. The company’s broad distribution framework provides a strong platform for further growth as it prepares to scale its operations.

Financial Performance and Peer Comparison

Oswal Pumps has demonstrated robust financial growth, with revenue from operations surging 97% to ₹758.6 crore in FY 2024 from ₹385 crore the previous year. Profit after tax also saw a significant increase, rising to ₹97.66 crore from ₹34.20 crore. The company compares itself with industry peers such as Kirloskar Brothers Ltd, Shakti Pumps (India) Ltd, WPIL Ltd, KSB Ltd, and Roto Pumps Ltd, positioning itself as a strong competitor in the Indian pump manufacturing sector.

Key Stakeholders in the IPO

The IPO will be managed by a consortium of leading financial institutions including IIFL Securities, Axis Capital, CLSA India, JM Financial, and Nuvama Wealth Management, who will serve as the book-running lead managers for the issue. Their involvement is expected to enhance investor confidence and facilitate a smooth listing process, underscoring the company’s readiness to enter the public market.