Oswal Pumps, established by Padam Sain Gupta (father of Vivek Gupta, one of its Promoters and Chairman and Managing Director), has commenced its operations in 2003 with the manufacturing of low-speed monoblock pumps. Over the years, it expanded its operations to manufacture grid-connected high-speed monoblock pumps, grid-connected submersible pumps and electric motors.

The company manufactures solar-powered and grid-connected submersible and monoblock pumps, electric motors comprising induction and submersible motors as well as solar modules, which it sells under the ‘Oswal‘ brand.

Over its 22 years of presence in the pumps market, it caters to the diverse requirements of end-users in the agricultural sector for irrigating fields; the residential sector for maintaining gardens and fountains, extracting water, supplying water to overhead tanks and cleaning households and small establishments; commercial premises; and industries.

Oswal Pumps is one of the few fully integrated Turnkey Solar Pumping Systems providers in India with the capability to manufacture solar powered agricultural pumps, solar modules and pump controllers and provide installation services for such systems.

Oswal Pumps started supplying pumps to players participating and providing Turnkey Solar Pumping Systems under the PM Kusum Scheme, including Tata Power Solar Systems. Under the PM Kusum Scheme, a foreign company is neither allowed to participate on a standalone basis nor as a member of a consortium and it is mandatory for bidders to procure essential components integral to the Turnkey Solar Pumping Systems, such as the motor pump, controller, balance of system, solar modules, and solar cells, from domestic sources.

As of December 31, 2024, it had executed orders for 38,132 Turnkey Solar pumping Systems directly under the PM Kusum Scheme for several states such as Haryana, Rajasthan, Uttar Pradesh and Maharashtra. It also supplied pumps to certain vendors empanelled under the Mukhyamantri Saur Krushi Pump Yojana launched by the Government of Maharashtra in 2019.

Of the estimated 0.61 million solar powered agricultural pumps installed at ground level in various states under the PM Kusum Scheme, as of December 31, 2024, it has, directly and indirectly, supplied 0.23 million solar powered agricultural pumps, representing approximately 38.04% of the total solar powered agricultural pumps installed.

Revenue from the supply of solar pumps directly and indirectly for the PM Kusum Scheme in 9mFY25, FY24, FY23 and FY22 stood at 87.26%, 85.72%, 69.74% and 55.32% respectively. Moreover, revenue from the supply of the Turnkey Solar Pumping Systems directly by the company under the PM Kusum Scheme has jumped from nil in FY23 to 44.77% in FY24 and then to 78.5% in 9mFY25.

The company operate a manufacturing facility located at Karnal, Haryana, which is one of India‘s largest single-site facilities for manufacturing pumps, covering a total land area of 41,076 square meters as of December 31, 2024.

It commenced manufacturing solar modules for Turnkey Solar Pumping Systems on January 8, 2024, through its wholly owned subsidiary, Oswal Solar Structure (OSSPL), enhancing its backward integration capabilities. Annual installed capacity for solar modules of OSSPL as of December 31, 2024, was 570 megawatts (MW) and its capacity utilization in Fiscal 2024 was 56.43% in the nine months ended December 31, 2024. To support the demand for Turnkey Solar Pumping Systems in the future and meet the growing demand for solar modules in the Indian and international markets OSSPL intend to further increase its capacity for solar modules by 1,500 MW by Fiscal 2027. Together with the Solar Module Facility, it also has a 1,500 MW manufacturing unit for ethylene-vinyl acetate (EVA) encapsulant (EVA Encapsulant Facility and manufacturing unit for aluminium frame for PV solar panel (Aluminium Frame Facility).

Revenues from the sale of solar modules only to third parties in 9mFY25 was 8.26% of revenue from operations. It also intends to supply solar modules to third party entities, such as existing and new distributors, players participating under the PM Kusum Scheme, original equipment manufacturers, government entities and entities engaged in private large roof top and ground-mounting projects.

It has an extensive network of distributors in India, which has grown from 473 distributors as of March 31, 2022, to 925 distributors as of December 31, 2024.

Exports accounted for 3.70%, 4.80%, 11.64% and 10.86% of revenue from operations (excluding revenue from the sale of traded goods and other operating revenue and adding back discounts and incentives) for the nine months ending December 31, 2024, Fiscal 2024, 2023 and 2022, respectively.

The issue and object

The issue comprises both a fresh issue of equity shares upto Rs 890 crore and an offer for sale up to 81,00,000 equity shares by Vivek Gupta, one of the prompters of the company.

The proceeds from its fresh issuance, to extent of Rs 89.86 crore for funding certain capital expenditure of the Company; Rs 272.76 crore for investment in its wholly-owned subsidiary, Oswal Solar, in the form of equity, for funding the setting up of new manufacturing units at Karnal, Haryana; Rs 280 crore for pre-payment/ re-payment, in part or full, of certain outstanding borrowings availed by the company; Rs 31.00 crore for investment in its wholly-owned Subsidiary, Oswal Solar, in the form of equity, for repayment/prepayment, in part or full, of certain outstanding borrowings availed by Oswal Solar; and general corporate purposes.

Total outstanding secured borrowings amounted to Rs 450.729 crore on a consolidated basis as of April 30, 2025.

Strength

One of the largest suppliers of solar powered agricultural pumps under the PM Kusum Scheme, it is positioned to capitalize on strong industry tailwinds.

Vertically integrated manufacturing competencies with strong engineering and design capabilities.

Comprehensive product portfolio in multiple product specifications.

Strong presence in major agricultural states in India including Haryana and growing presence in other states.

Extensive distribution network catering to a diversified customer base.

Weakness

About 78.50%, 44.77% and 0% of revenue from operations in 9mFY25, FY24 and FY23 from the direct supply of Turnkey Solar Pumping Systems which are awarded on a tender basis by state and central Government institutions under the PM Kusum Scheme. Any reduction in Government funding for this scheme or its inability to obtain contracts may have an adverse impact on the business of the company.

The number of Turnkey Solar Pumping Systems awarded by state and central government institutions are subject to receipt of interest from relevant beneficiaries and the actual number of Turnkey Solar Pumping Systems that the company eventually install may be lower than those awarded.

Heavy dependence on the agricultural sector with about 96.55%, 96.06%, 90.84% and 87.03% of revenue from operations in 9mFY25, FY24, FY23 and FY22 come from supply to agriculture sector, whose performance tends to be fluctuating.

Sales of majority of its products are geographically concentrated, with the four states of Haryana, Maharashtra, UttarPradesh and Rajasthan accounting for 90.47% and 90.78% of its 9mFY25 and FY24 revenue.

Top 1/5/10 customers account for 25.66%/71.29%/78.87% and 35.04%/68.05% and 79.50% of revenue in 9mFY25 and FY24, respectively.

Limited experience in the manufacturing of solar modules and do not have prior experience in the manufacturing of EVA.

Subsidiaries Oswal Solar and Oswal Green have incurred losses in the past and may incur losses in the future which could have an adverse effect on business and results of operations of the company.

Trade receivables as a percentage of revenue from operations increased from 18.94% in FY23 to 31.63% in FY24 and then to 66.73% in 9mFY25 with increase in direct supply of Turnkey Solar Pumping Systems to PM Kusum Scheme.

The availability and cost of copper and solar cells required for the manufacturing of pumps and solar modules.

The solar pump and solar module markets present several challenges that could adversely affect its business.

Have experienced negative cash flows from operating activities in the nine months ending December 31, 2024, and may continue to have negative cash flows in the future.

Valuation

Consolidated re-stated revenue for the fiscal ending March 2024 stood higher by 97% to Rs 1065.67 crore. With OPM expanding by 480 bps to 19.8%, the growth ofoperating profit was 160% to Rs 150.12 crore. Finally, the net profit after MI was up by 186% to Rs 97.67 crore.

For the 9mFY25, sales were Rs 1065.67 crore and with EBITDA margin stand at 30.1%, the operating profit was 321.01 crore and the net profit after MI was Rs 216.71 crore. Sharp jump in profitability is largely due to change in revenue mix in favor of direct supply of Turnkey Solar Pumping Systems under the PM Kusum Scheme compared to supply of pumps/equipments to other turnkey players, backward integration into manufacturing of solar modules in Jan 2024 and benefits of operating leverage with increased turnover.

On expanded equity, the EPS for FY2024 and annualized EPS for 9mFY25 was Rs 8.6 and Rs 25.3, respectively. The issue price (on upper price band) discounts the annualized 9mFY25 EPS by 24.3 times. The P/BV stood at 5.4 times.

In comparison, Shakti Pumps quotes at a PE of 28.4 times of its FY25 EPS. WPIL, Kirloskar Brothers and Roto Pumps quotes at a PE of 31.2 times, 34.5 times and 54.3 times of their FY25 EPS. KSB quotes at a PE of 58 times of its EPS for TTM period ended March 2025.