Oswal Pumps IPO Review: Playing in High-growth Territory

India’s shift to clean energy is not just a policy; it’s an opportunity, and Oswal Pumps is riding this wave. The Karnal-based company, a leader in solar-powered agricultural pumps, is going public with an IPO from 13 to 17 June 2025 and will be listed on both NSE and BSE. With strong financials, vertical integration, and a key role in India’s green energy movement, the Oswal Pumps IPO is a must-watch for both institutional and retail investors.

The IPO comes at a time when India’s renewable energy sector, especially solar irrigation, is gaining traction, thanks to schemes like PM Kusum Yojana. Let’s dig deeper into Oswal Pumps IPO review:

Oswal Pumps IPO Review: Offer Details

• IPO Price Band: INR 584 to INR 614 per share
• Total Issue Size: INR 1,363.04 crore to INR 1,387.34 crore
  • Fresh Issue: INR 890 crore
  • Offer for Sale (OFS): 81 lakh shares (INR 473.04 crore to INR 497.34 crore)
• Lot Size: 24 shares (Minimum Investment: INR 14,736)
• Listing Date: 20 June 2025
• Retail Investor Reservation: 35%
• Lead Managers: IIFL Capital, Axis Capital, CLSA India, JM Financial, Nuvama
• Registrar: MUFG Intime India Pvt Ltd

Business Overview: A Solar-Powered Growth Story

Founded in 2003 by Padam Sain Gupta, Oswal Pumps has transitioned from a low-speed monoblock pump maker to one of India’s fastest-growing and most integrated solar pump manufacturers. Under the leadership of Vivek Gupta, the company embraced the renewable energy pivot early—capitalizing significantly on the PM Kusum Scheme launched in March 2019.

Oswal’s product line includes:

• Solar-powered submersible and monoblock pumps
• Grid-connected pumps
• Electric motors
• Solar modules

In 2021, the company added Turnkey Solar Pumping Systems to its offerings—complete end-to-end solutions that include installation, solar panels, mounting structures, controllers, and pumps. By 31 December 2024, Oswal had delivered over 2.3 lakh solar pumps under the PM Kusum Scheme, directly or indirectly, accounting for a 38.04% share of all such installations in India (approx. 0.23 million out of 0.61 million).

What Makes Oswal Pumps Unique?

India’s Fastest-Growing Vertically Integrated Solar Pump Maker

With a CAGR of 45.07% in revenue from FY 2022 to FY 2024, Oswal Pumps has been the fastest-growing player in India’s solar pump industry (Source: 1Lattice Report). Unlike peers who depend on external suppliers, Oswal is vertically integrated — it manufactures everything in-house, including pumps, motors, solar modules, and control units.

This not only ensures quality and efficiency but also boosts margins. The company posted an impressive EBITDA margin of 30.12% for the nine months ended 31 December 2024 — the second-highest among listed peers.

Dominance in the PM Kusum Scheme

The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM Kusum) Scheme, with a government outlay of INR 34,400 crore, is a game changer in India’s green energy policy. Oswal is deeply entrenched in this initiative.

As of 31 December 2024:

• Executed 38,132 Turnkey Solar Pumping Systems directly under PM Kusum.
• Supplied 1,45,578 solar pumps to players under PM Kusum.

In FY 2024, a staggering 85.72% of revenue (INR 626.92 crore) came from PM Kusum-related sales. This climbed to 87.26% for the 9M FY25.

Strong Financials & Profitability Surge

	FY 2022	FY 2023	FY 2024	9M FY 2025
Revenue	360.38	385.04	758.57	1,065.67
Net Profit	16.93	34.20	97.67	216.71
Net Margin (%)	4.70	8.88	12.88	20.34
EBITDA Margin (%)	10.69	15.02	19.79	30.12
EPS	1.70	3.44	9.82	25.35*
PE Ratio (Post-Issue)	–	–	59.48–62.54	23.03–24.22*

Oswal’s 45.07% revenue CAGR from FY22 to FY24 is matched by a leap in profitability and operational efficiency. The EBITDA growth is telling — from INR 38.52 crore in FY22 to INR 321.01 crore in 9M FY25, driven by operational efficiencies and scale benefits.

Strategic Utilization of IPO Proceeds

The company proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects:

• Funding certain capital expenditures of the company – INR 89.37 crore
• Investment in the wholly-owned subsidiary, Oswal Solar, in the form of debt or equity, for funding the setting up of new manufacturing units at Karnal, Haryana – INR 419.16 crore
• Pre-payment/ re-payment, in part or full, of certain outstanding borrowings availed by the company – INR 235 crore
• Investment in the wholly-owned Subsidiary, Oswal Solar, in the form of debt or equity, for repayment/prepayment, in part or full, of certain outstanding borrowings availed by Oswal Solar – INR 26 crore
• General corporate purposes

Backward Integration: A Competitive Moat

Oswal Pumps’ ability to manufacture most of its product components in-house is a major differentiator in a fragmented and import-reliant industry. From cast iron and stainless steel pump bodies to solar modules and smart pump controllers, the company covers the entire value chain. It even uses scrap metal to produce parts like impellers, suction valves, and sleeves — a sustainability practice that also enhances margins.

Their facilities at Karnal, Haryana — spanning over 41,076 square meters — rank among India’s largest single-site pump manufacturing setups. Annual capacities include:

• Stainless Steel Pumps: 1,160.07 Metric tonne
• Cast Iron Pumps: 2,366.04 Metric tonne
• Motors: 1,876.32 Metric tonne
• Solar Modules: 570 Megawatt

This integration has not only reduced dependency on suppliers but allowed Oswal Pumps to control quality and scale profitably — a key contributor to its ROCE of 81.85% in FY 2024 and RONW of 88.73%.

Widening Distribution & Growing Brand Visibility

As of 31 December 2024, Oswal had 925 distributors, nearly doubling from 473 in FY 2022. It recently launched ‘Oswal Shoppe’, a retail program aimed at boosting brand recall and exclusive availability. With 248 outlets across Haryana, Punjab, Uttar Pradesh, and Rajasthan, this initiative directly engages rural consumers — the core demographic for solar pump buyers.

In parallel, Oswal Pumps exports to 22 countries including Australia, UAE, Iraq, and Italy. Export revenues have held steady, contributing around 4–11% of total revenues in recent years, a solid buffer against domestic volatility.

Comparison with Listed Peers

	Revenue FY24 (INR Cr)	EPS (INR)	PE Ratio	ROE (%)
Oswal Pumps	758.57	9.82	59.48–62.54 (Pre-IPO) / 23.03–24.22 (Post-IPO)	88.73
Kirloskar Brothers	4,001.19	43.84	41.94	22.30
Shakti Pumps India	1,370.73	12.82	66.72	24.15
WPIL	1,664.40	17.72	27.31	18.78
KSB	2,247.24	11.99	66.79	17.07
Roto Pumps	274.50	6.28	42.08	21.95

Despite being smaller in topline, Oswal Pumps leads in return ratios, thanks to its superior margins and efficient capital structure (Debt/Equity at 0.42 in FY24).

Business Mix: Heavy Reliance on Government Schemes, but Diversifying

The company generates over 85% of revenue from government-backed PM Kusum scheme orders — a clear concentration risk. However, Oswal Pumps has taken steps to diversify:

• Retail Distributor Revenue: Grew to INR 104.58 crore (10.62% of revenues in 9M FY25)
• Exports: INR 36.45 crore in 9M FY25, and FY24 exports were INR 35.07 crore, accounting for 4.8% of total revenue
• Institutional Clients: Tata Power Solar, Ecozen Solutions

Additionally, it has open and awarded orders from multiple states including Uttar Pradesh (3,799 units), Himachal Pradesh, Rajasthan (open orders), and Maharashtra (23,609 units already supplied). Government adoption cycles are long, but once underway, offer stable income and scale opportunities.

Oswal Pumps IPO Review: Investment Rationale

✅ High Growth Potential

• Revenue has nearly tripled from FY22 to FY24
• Post-IPO EPS (annualized): 25.35, offering a forward-looking PE of just 23–24x

✅ Green Energy Tailwinds

• India’s solar pump market projected to grow from INR 16,450 crore (FY25) to INR 27,110 crore (FY30) at a CAGR of 11%
• PM Kusum targets 1.4 million standalone solar pumps; only 0.77 million installed so far

✅ Excellent Return Metrics

• ROCE (FY24): 81.85%
• RONW (FY24): 88.73%
• Among the best in the industry

✅ Efficient Capital Use

• IPO funds are directed toward capacity expansion and debt reduction — not promoter exits. Vivek Gupta, the sole selling shareholder, is offloading just 8.1 million shares (no cost of acquisition).

Risks to Consider

• Dependency on Government Schemes: Over 78% of revenues are tied to PM Kusum. Any policy reversal or delays in execution could affect cash flows.
• Execution Risk: Letters of award are often subject to actual beneficiary selection — not all awarded pumps are guaranteed to be delivered.
• Competitive Market: Players like Shakti Pumps and WPIL have higher revenues and stronger presence across diversified segments.
• Working Capital Intensive Business: Solar systems require upfront inventory procurement before government reimbursements are realized.

Final Verdict: Should You Invest in Oswal Pumps IPO?

For long-term investors and those looking to align with India’s green energy goals, Oswal Pumps offers a powerful combination of growth, profitability, and sustainability.

While policy risk cannot be ignored, the company’s unmatched execution under the PM Kusum Scheme, backward integration, and robust return ratios offer a compelling story. At a post-IPO P/E of just 23–24x, Oswal Pumps is attractively valued compared to listed peers with less profitability.