Oswal Pumps IPO: Why market guru Anil Singhvi wants you to avoid this Rs 890-crore issue

Oswal Pumps IPO opens today

The Rs 890 crore IPO of solar and submersible pump maker Oswal Pumps opened for subscription on Friday, June 13, and will remain open till Tuesday, June 17. But should you apply? Market guru Anil Singhvi has a clear answer.

Oswal Pumps IPO: Key positives

• Backed by experienced promoters with two decades in pump manufacturing

• Presence in India’s growing renewable energy and solar pump segment

• Turnkey solar pump system provider under the PM-KUSUM scheme

• Rs 1,100 crore order book and Rs 3,200 crore bid pipeline

Oswal Pumps IPO: Key concerns

• Revenue and profit jumped sharply only in FY24 despite long operating history

• Cash flow from operations turned negative at Rs 197 crore in FY25

• Short-term borrowings surged from Rs 73 crore in FY22 to Rs 334 crore in FY25

• High trade receivables indicate working capital stress

• Heavy dependence on government orders and policy continuity

Oswal Pumps IPO Price Band, Lot Size

• Price Band: Rs 584-Rs 614 per share

• Lot Size: 24 shares and multiples thereafter

• Issue Size: Rs 890 crore (fresh issue); no offer for sale

Anchor investors in Oswal Pumps IPO

The company raised Rs 416 crore from marquee investors including Societe Generale, BNP Paribas, Quant MF, Kotak MF, ICICI Prudential, Amundi Funds, and others.

Oswal Pumps IPO Listing Date, Allotment

• IPO closes: June 17

• Likely allotment: June 18

• Tentative listing: June 20 on BSE and NSE

Use of proceeds

• Rs 273 crore to subsidiary Oswal Solar for new facility

• Rs 280 crore to repay debt

• Rs 89.8 crore for capex

• Remaining for general corporate purposes

Anil Singhvi's take: "Avoid this IPO due to sudden financial jump and negative cash flows"

According to Anil Singhvi, investors should avoid the Oswal Pumps IPO, citing multiple red flags in its financial performance.

Oswal Pumps IPO: Sudden spike in profit raises red flags, says Anil Singhvi

The company is 20 years old but only recently saw a sudden jump in revenue and margins. This discomforts me, Singhvi said. Cash flow is negative, borrowings have spiked, and trade receivables are high investors should be cautious.

Potential growth chances

While he acknowledged the experienced promoters and growth potential in the solar pump segment, Singhvi stressed that "the sudden spike in profit margins from 5 per cent in FY22 to over 20 per cent in FY25 is a key concern."