Oswal Pumps Ltd IPO

One of the largest supplier of solar powered agricultural pumps under the PM Kusum Scheme, well positioned to capitalise on strong industry tailwinds.

Vertically integrated manufacturing competencies.

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.

Experienced Promoter and senior management team.

The company derives a signification portion of its revenues from the supply of Turnkey Solar Pumping Systems which are awarded on a tender basis by state and central Government institutions under the PM Kusum Scheme (Rs. 7,732.07 million, Rs. 3,274.15 million, nil and nil from the supply of the Turnkey Solar Pumping Systems directly under the PM Kusum Scheme in the nine months ended December 31, 2024 and Fiscals 2024, 2023 and 2022, respectively, representing 78.50%, 44.77%, nil and nil of revenue from operations (excludes revenue from the sale of traded goods and other operating revenue and adding back discounts and incentives) during such periods). However, the company cannot assure you that the Government will continue this scheme or that its bids will be accepted and future contracts will be awarded to it. Any reduction in Government funding for this scheme or its inability to obtain contracts may have an adverse impact on its business, results of operations, financial condition and cash flows. Further, in the nine months ended December 31, 2024 and Fiscal 2024, 2023 and 2022, revenue from operations for its Material Subsidiary, Oswal Solar on a standalone basis, which is currently engaged in the manufacturing of solar modules and primarily supplying to the Company, was Rs. 2,812.83 million, Rs. 593.22 million, nil and nil, respectively.

Its business is dependent on the performance of the agricultural sector (Rs. 9,510.52 million, Rs. 7,024.71 million, Rs. 3,254.70 million and Rs. 2,964.21 million from the agricultural sector in the nine months ended December 31, 2024 and Fiscals 2024, 2023 and 2022, respectively, representing 96.55%, 96.06%, 90.84% and 87.03% of revenue from operations (excluding revenue from the sale of traded goods and other operating revenue and adding back discounts and incentives) during such periods). Any adverse changes in the conditions affecting the agricultural sector may adversely impact its business, results of operations, financial condition and cash flows. Further, in the nine months ended December 31, 2024 and Fiscal 2024, 2023 and 2022, revenue from operations for its Material Subsidiary, Oswal Solar on a standalone basis, which is currently engaged in the manufacturing of solar modules and primarily supplying to the Company, was Rs. 2,812.83 million, Rs. 593.22 million, nil and nil, respectively.

The company derives a significant portion of its revenues from the sale of the company products in the states of Haryana (34.75%, 72.28%, 44.00% and 49.60% in the nine months ended December 31, 2024 and Fiscal 2024, 2023 and 2022, respectively), Maharashtra (44.30%, 7.85%, 18.69% and 9.85% in the nine months ended December 31, 2024 and Fiscal 2024, 2023 and 2022, respectively), Uttar Pradesh (6.14%, 6.12%, 3.76% and 2.73% in the nine months ended December 31, 2024 and Fiscal 2024, 2023 and 2022, respectively) and Rajasthan (5.28%, 4.53%, 7.29% and 17.85% in the nine months ended December 31, 2024, Fiscal 2024, 2023 and 2022, respectively). Consequently, any adverse developments affecting its operations in such regions, could have an adverse impact on its business, results of operations, financial condition and cash flows.

Its business largely depends upon the company top 10 customers, which contributed 78.87%, 79.50%, 72.56% and 66.29% of its revenue from operations for the nine months ended December 31, 2024, Fiscals 2024, 2023 and 2022, respectively. The loss of any of these customers could have an adverse effect on its business, results of operations, financial condition and cash flows.

Its operations are supported by two manufacturing facilities which are situated at Karnal, Haryana. The Companys facility is dedicated to the production of pumps and motors, while its Material Subsidiary, Oswal Solars facility is dedicated to manufacturing of solar modules. The geographical concentration of its manufacturing facilities exposes the company operations to potential risks arising from local and regional factors such as adverse social and political events, weather conditions and natural disasters in this region.

The company plan to increase its manufacturing capacity for solar modules. If such expansion does not lead to increases in its revenue from operations, it could have an adverse effect on its business, results of operations, financial condition and cash flows. Further, its proposed capacity expansion plan is subject to the risk of unanticipated delays in implementation and cost overruns. Further, the company has limited experience in the manufacturing of solar modules, and its may not be successful in this endeavour.

The company intend to utilise a portion of the Net Proceeds to purchase certain equipment and machinery for its manufacturing facility at Karnal, Haryana and for the company Material Subsidiary, Oswal Solars existing and new manufacturing facility at Karnal, Haryana which is subject to cost escalation and is also based on quotations that may be subject to change or may expire. The company is yet to place orders for the purchase of such equipment and machinery and the company cannot assure you that its will be able to place orders for such equipment and machinery, in a timely manner or at all. Further, given that the company does not have prior experience in the manufacturing of ethylene-vinyl acetate (EVA), the company cannot assure you that its proposed expansion in relation to EVA will be successful.

Its inability to meet the company obligations, including financial and other covenants under its debt financing arrangements could adversely affect its business, results of operations, financial condition and cash flows.

Its 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 its business and results of operations.

The number of Turnkey Solar Pumping Systems that the company is 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 to it.