Oswal Pumps IPO: Brokerage Bulish, Good News from Gray Market, yet Investors did not like this IPO

New Delhi. The IPO of pump manufacturer Oswal Pumps Limited opened today. Investors can bid till June 17 for the shares of this issue. On the first day, this IPO did not receive a response as expected from investors. On the first day, this IPO is just 41 percent subscribed. Reserve part has received 44 percent subscription for retail investors. The reserve share for qualified institutional buyers (QIB) is 0.08 per cent and the reserve share for non-institutional investors (NII) is only 0.78 per cent. The special thing is that in the gray market, Oswal pump shares are trading at 12 % premium. Brokerage houses also have a clear stand towards this IPO.

The company has targeted to raise a total of ₹ 1,387.34 crore through this IPO. This includes a fresh issue of ₹ 890 crore and an offer of 497.34 crore offer for sale (O.S). The company has a price band of shares ₹ 584 to ₹ 614 per share. Oswal pumps IPO have 24 shares in a lot. Retail investors will have to bid for at least one lot. On June 18, it will have shares allotted, while on June 20, the company shares can be listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

Analysts believe that the company’s demand for integrated business models, experienced promotions, strong distributor networks and rising solar pumps makes it an opportunity for a long -term investment. Brokerage House SBI Securities has advised to subscribe for a long period.

Brokerage says that the company is one of the biggest suppliers of solar pumps under the PM Kusum Yojana in FY23 and FY24. It is one of some companies in India that produces a vertically integrated turny solar pumping system. The company has a bid pipeline of Rs 3,200 crore, which shows good growth possibilities. However, there may be risks for the company’s dependence on government projects and policy and delay in cash flow.

Brokerage House Bajaj Broking has advised to subscribe for the long term. According to brokerage, it is one of the leading companies in the solar pump segment. The company has registered growth in both its revenue and net profit. The main reason for the rise in profit from FY24 is to move towards the solar pump segment.

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