Solar pumps maker Oswal Pumps said to plan Rs 2,000 crore IPO

Solar pumps maker Oswal Pumps eyes Rs 2,000 crore fundraise through IPO

Oswal Pumps Ltd., a manufacturer of solar and other kinds of pumps, plans to come out with a Rs 2,000 crore initial public offering, people aware of the matter told Moneycontrol.

“The company is working with investment banks JM Financial, IIFL, Axis Capital, CLSA and Nuvama to prepare its draft red herring prospectus and the draft prospectus is expected to be filed in the next couple of months,” one person said. “The IPO will include a mix of primary and secondary share sales. The company will use the capital to expand its manufacturing capacity, working capital requirements and other purposes.”

An email sent to Oswal Pumps did not elicit a response.

The company was incorporated in 2003 by Padam Sain Gupta and his sons Rajeev Gupta and Vivek Gupta. Oswal Pumps makes submersible pumps, monoblock pumps, electric motors and solar pumps catering to the building services, agricultural and industrial sectors.

Solar pumps run on electricity generated by photovoltaic panels or energy available from sunlight, as opposed to the use of grid electricity or diesel.

The company has an installed capacity of 300,000 pumps and 100,000 electric motors per annum. Its plant is located in Karnal, Haryana.

Growth outlook

Oswal Pumps reported a revenue of Rs 495.24 crore in the nine-month period ended December 31, 2023, according to a report by Care Ratings. In FY23, the company’s topline stood at Rs 392.18 crore. For the nine-month period ended December 31, 2023, Oswal Pumps reported a profit of Rs 70.35 crore, almost double the earnings of Rs 37.34 crore in FY23.

According to Care Ratings, the company’s growth outlook is supported by the government’s push for solar pumps.

“The government is emphasising use of solar pumps by providing capital subsidy for installation of solar pumps as well as solarisation of existing pumps to reduce the consumption of grid power (which is heavily subsidised by the state government or is provided entirely free of cost). For this, government has launched various schemes including Kisan Urja Suraksha Evam Utthaan Mahaabhiyan (KUSUM). Hence the same has boosted the demand of solar submersible pumps,” Care said in a report.

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The company’s business risk profile is expected to improve on account of the government’s policy to replace grid pumps with solar pumps, resulting in increased demand for solar pumps, it added.