Oswal Pumps IPO: Hot Solar Pump Bet or Beware the Valuation?

The Oswal Pumps IPO launched on June 13, 2025, with a price band of ₹584–₹614 per share, aiming to raise ₹1,387.34 crore via a fresh issue and offer-for-sale. In a market where renewable irrigation solutions are in focus, this vertically integrated solar pump maker is drawing attention—but should you subscribe? Let’s unpack the details in a straightforward, conversational style.

IPO Details & Timeline

The three-day bidding window runs from June 13 to June 17, with allotment likely on June 18 and listing around June 20 on BSE and NSE. The lot size is 24 shares, so retail investors need at least ₹14,016 to apply. Book-running lead managers include IIFL Capital, Axis Capital, CLSA India, JM Financial, and Nuvama Wealth Management.

Issue Size & Price Band

Oswal Pumps plans to raise ₹890 crore via fresh equity and ₹497.34 crore through offer-for-sale. At the upper band of ₹614, the implied market cap post-IPO is around ₹6,998 crore, translating to trailing annualized P/E of 24.2x and EV/EBITDA of 16.4x based on 9MFY25 numbers. Analysts note this is at a discount compared to peers trading higher, but the valuation still requires scrutiny.

Business & Growth Drivers

Oswal Pumps claims to be India’s fastest-growing vertically integrated solar pump manufacturer between FY22–FY24, posting robust revenue, EBITDA, and PAT CAGRs of 44%, 103%, and 134% respectively. With an order book of ₹1,100 crore and a bid pipeline of ₹3,200 crore, policy tailwinds under schemes like PM-KUSUM support growth visibility in sustainable irrigation solutions.

Subscription Status & Grey Market Premium

On day one (June 13), the IPO was subscribed around 42%, with retail at 45%, NII at 79%, and QIB at 8%. A grey-market premium (GMP) of ₹40 suggests a tentative secondary price near ₹654, indicating initial optimism. However, early subscription figures are modest, implying cautious demand amid multiple IPOs in the pipeline.

Pros & Cons

• Pros:
• Strong growth track record and integration across manufacturing and distribution.
• Policy support for solar-powered agricultural pumps under national schemes.
• Large order book and sizable pipeline provide near-term revenue visibility.
• Cons:
• Valuation, though at a discount to peers, remains elevated given sector volatility.
• Profitability vulnerable to raw material costs and execution risks in scaling capacity.
• Market sentiment for IPOs can shift quickly; initial subscription pace suggests mixed enthusiasm.

Expert Views

Nirmal Bang and Mehta Equities recommend subscribing for long-term investors, citing reasonable valuation vs peers and robust growth. They highlight the company’s vertical integration and positioning in solar irrigation. However, they also caution monitoring execution and margin pressures.

Investor Takeaways

• Evaluate Valuation: At ₹614, ensure P/E of ~24x aligns with your risk appetite and sector outlook. Compare with listed pump manufacturers.
• Assess Growth Visibility: Order book and pipeline look strong, but confirm stability of margins amid raw material fluctuations.
• Monitor Subscription Trends: If subscription picks up in later days, it signals stronger demand; weak subscription may lead to listing volatility.
• Consider Long-Term Theme: Solar irrigation is a structural growth area in India. If you believe in sustained policy support and market expansion, a selective allotment could pay off over time.
• Risk Management: Limit allocation to a small portion of your portfolio in case of listing-day volatility or sector slowdown.

Conclusion

Oswal Pumps IPO offers exposure to a fast-growing solar pump business benefiting from government schemes and rising demand for sustainable irrigation. The valuation at the upper band seems reasonable relative to peers, but early subscription figures and execution risks warrant caution. Long-term investors who believe in the solar irrigation theme may consider subscribing in moderation, while keeping positions balanced and monitoring post-listing performance closely.

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