Oswal Pumps shares list at 3% premium over IPO price; miss GMP estimates

Water and solar pumps manufacturer Oswal Pumps made a lower-than-expected debut on the domestic bourses today, in an otherwise positive broader market. The shares of Oswal Pumps debuted at ₹632 per share on the BSE, a premium of 2.93% over its IPO price of ₹614 per share, with a market capitalisation of ₹7,203.37 crore. On the NSE, Oswal Pumps shares listed at ₹634, up ₹20 apiece, or 3.26%, over the issue price. Meanwhile, the equity benchmark indices, the Sensex and the Nifty were trading higher by 0.3% each.

The listing of Oswal Pumps was below Street expectations as the stock was trading at a premium of ₹41 in the unlisted market. Ahead of the listing, Oswal Pumps shares were commanding a grey market premium (GMP) of 6.68%, indicating the listing price to be around ₹655 per share, according to InvestorGain.com, an IPO GMP performance tracker platform.

Prashanth Tapse, Senior VP (Research), Mehta Equities, in his pre-listing view, anticipated a decent listing gain in the range of 10–15% for Oswal Pumps, citing strong subscription demand and ongoing market sentiment.

For allotted investors, Tapse advised a ‘HOLD’ for the long term, saying that the company is well-positioned to benefit from structural growth drivers in the agri and infrastructure sectors. For non-allotted investors, he recommended considering “accumulating on any dips post-listing”, particularly if broader market sentiment causes short-term volatility.

Oswal Pumps’ ₹1,387-cr IPO subscribed 34.4x

The ₹1,387 crore public issue of Oswal Pumps, which opened for subscription between June 13 and June 17, was subscribed 34.42 times, driven by a strong response from qualified institutional buyers (QIBs) and non-institutional investors (NIIs). The portions reserved for QIBs and NIIs were booked 88.08 times and 36.70 times, respectively, while the quota reserved for retail investors was subscribed 3.60 times.

The public issue of the Haryana-based water and solar pumps manufacturer was a combination of fresh issue of 1.45 crore shares worth ₹890 crore and offer for sale of 0.81 crore shares amounting to ₹497.34 crore. The price band for the IPO was ₹584-614 per share and the lot size for the public offer was 24 shares.

Oswal Pumps intends to use the capital raised for investment in its subsidiary, repay debts, fund capital expenditure of the company, and meet general corporate purposes. It proposes to use ₹280 crore for payment of certain loans availed by the company; investment of ₹272.76 crore in the wholly-owned subsidiary, Oswal Solar, in the form of debt or equity, for funding the setting up of new manufacturing units at Karnal, Haryana. Besides, ₹89.86 crore will be utilised for funding certain capital expenditure of the company.

Ahead of the IPO, Oswal Pumps had raised ₹416.20 crore from anchor investors by allocating 67,78,533 equity shares at ₹614 per share on June 12. Some of the marquee Institutions that participated includes Societe Generale, BNP Paribas, Smallcap World Fund Inc, ICICI Prudential, Aditya Birla Sunlife, Kotak Mahindra MF, Quant MF, Amundi Funds, 360 One, Motilal Oswal MF, Bandhan Small Cap Fund, Edelweiss MF, Troo Capital, Nuvama MF, Sundaram MF, Edelweiss Life Insurance, Mahindra Manulife, etc.

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