Omnitech Engineering IPO booked 8% on Day 1; should you subscribe? Check GMP

Omnitech Engineering IPO sees robust subscription.

• Omnitech Engineering IPO subscribed 2 percent on opening day, so far.
• IPO price band set at Rs 216-227; issue closes on Feb 27.
• SBI Securities gives "Subscribe for Long Term" rating.

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Omnitech Engineering initial public offer (IPO) opened for public subscription in the primary market on Wendesay. A day before, the manufacturer of precision-engineered components raised over Rs 174 crore from anchor investors.

The IPO got subscribed 8 percent on the first day of share sale on Wednesday. The company's IPO got bids for 15.63-lakh shares against 1.89-crore shares on offer, according to the NSE data.

The quota for retail individual investors was subscribed 6 percent, while the portion for non-institutional investors received 6 percent subscription.

The company's Rs 583-crore initial share-sale opened for public consumption on February 25 and will conclude on February 27. The price band has been fixed at Rs 216 - 227 per share, valuing the company at over Rs 2,800 crore.

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Omnitech Engineering IPO GMP Today Price 

According to platforms tracking the grey market activities, the shares of Omnitech Engineering are commanding of about 2 percent in the unofficial market.

Omnitech Engineering IPO: Should You Subscribe?

SBI Securities has recommended a "Subscribe for Long Term" rating for the IPO of Omnitech Engineering.

According to its research note, Omnitech Engineering is a high-growth precision manufacturing company supported by a robust order book of Rs 1,765 crore, providing strong near-term revenue visibility at approximately 5.1x of FY25 revenues. Over the FY23–FY25 period, the company has delivered a healthy CAGR of 39 percent in revenue, 36 percent in EBITDA, and 17 percent in profit after tax (PAT).

Post-issue, the company’s debt-to-equity ratio is expected to improve significantly from 1.6x to 0.5x, as Rs 50 crore from the IPO proceeds will be allocated toward debt repayment, thereby strengthening the balance sheet and enhancing profitability.

At the upper price band of Rs 227, the issue is valued at a FY25 P/E multiple of 64.0x based on post-issue capital. Backed by a strong EBITDA margin profile of 30–35 percent and a solid order book position, SBI Securities recommends investors subscribe to the issue at the cut-off price with a long-term investment perspective.

Proceeds from the fresh issue will be utilised to repay debt, set up two new manufacturing facilities, fund capital expenditure requirements and general corporate purposes.

Omnitech Engineering manufactures high-precision engineered components and supplies to global customers across industries like energy, motion control & automation, industrial equipment systems, and other diversified industrial applications.

Its clientele includes Halliburton Energy Services, Suzlon, Oshkosh Aerotech, Weatherford, Lufkin Industries, Oilgear, Donaldson Company, PUSH Industries and Bharat Aerospace Metals.

Rajkot-based Omnitech Engineering will compete with the likes of Azad Engineering, Unimech Aerospace and Manufacturing, PTC Industries, Dynamatic Technologies and MTAR Technologies.

Omnitech Engineering will make its stock market debut on March 5.

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