Oswal Pumps IPO had a muted listing on June 20, 2025, debuting at a premium of approximately 3.2% on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The IPO listed at ₹634 on NSE and ₹632 on BSE, compared to the IPO price of ₹614. This marginal premium has prompted investors to assess whether to buy, hold, or sell their shares.

IPO Overview

The initial public offering (IPO) of Oswal Pumps was launched on June 13, 2025, and closed on June 17, 2025. The IPO size was ₹1,387.34 crores, consisting of a fresh issue of 1.45 crore equity shares worth ₹890 crore and an offer for sale (OFS) of 81 lakh equity shares amounting to ₹497.34 crore. The IPO price band was fixed at ₹584 to ₹614 per share, with a lot size of 24 shares, requiring a minimum investment of ₹14,736 for retail investors. The IPO was oversubscribed by 34.42 times, indicating strong investor interest. The qualified institutional buyers (QIBs) portion was subscribed 88.08 times, the non-institutional investors (NII) portion 36.70 times, and the retail individual investors (RIIs) portion 3.60 times.

Grey Market Premium (GMP)

Ahead of the listing, the grey market premium (GMP) for Oswal Pumps IPO was around ₹41-63 per share, suggesting a listing price of approximately ₹655-677, which is 6-10% higher than the IPO price. However, the actual listing was lower than the GMP expectations, indicating some last-minute fluctuations in market sentiment.

Company Overview

Founded in 2003 and based in Karnal, Haryana, Oswal Pumps is a manufacturer of solar and non-solar pumps. The company has a significant presence in the solar pump segment, supported by government schemes such as PM-KUSUM. For the nine months ending December 2024, Oswal Pumps reported revenue of ₹1,067 crore and a net profit of ₹216 crore. The company has a diversified product portfolio across agriculture, industrial, and domestic water solutions and has exported products to 17 countries.

Financial Performance and Key Ratios

Oswal Pumps has demonstrated strong financial growth in recent years. Its revenue grew at a CAGR of 45.07% between Fiscal 2022 and Fiscal 2024. For the last three fiscals, the company has posted an average EPS of Rs. 6.34 and an average RoNW of 81.15%.

Factors to Consider

• Growth Prospects: Oswal Pumps is expected to benefit from the government's focus on rural infrastructure and solar-powered irrigation systems. The company has a strong order book and bid pipeline, indicating decent growth visibility in the coming years.
• Financial Health: The company intends to use the IPO proceeds to reduce debt and expand its manufacturing capabilities, which should improve its financial stability and growth potential.
• Valuation: Some analysts believe that the IPO was aggressively priced, while others find the valuation reasonable compared to industry peers, considering Oswal's growth prospects and market position.
• Dependence on Government Schemes: A significant portion of Oswal Pumps' revenue comes from government supplies under the PM-KUSUM scheme. Any changes in government policies or funding could impact the company's revenue.

Analyst Recommendations

Despite the muted listing, several analysts recommend holding the stock for the long term. These recommendations are based on the company's diversified product portfolio, potential benefits from government infrastructure initiatives, and strong financial performance. Some analysts suggest that non-allotted investors could accumulate the stock on dips, especially if broader market sentiment causes short-term volatility.

Investment Strategy

• For those who received allotment: Holding the shares for the long term appears to be a reasonable strategy, considering the company's growth potential and positive industry outlook.
• For fresh investors: It may be prudent to wait and watch how the stock performs in the coming days before making a fresh investment.

Conclusion

Oswal Pumps IPO's muted listing presents a mixed picture for investors. While the listing gains were modest compared to initial expectations, the company's strong fundamentals, growth prospects, and positive industry outlook suggest potential for long-term value creation. Investors should carefully consider their risk appetite, investment horizon, and the factors discussed above before making a decision on whether to buy, hold, or sell the shares.