Trenzoc The Listing Day Drama: Modest Gains, Mixed Reactions
The air crackled with anticipation on June 20, 2025, as Oswal Pumps IPO listing (NSE: OSWALPUMPS) made its stock market debut. Investors who’d chased the heavily oversubscribed IPO (34.42x!) watched closely. The result? A tepid 3.26% premium at ₹634 on the NSE and a 2.93% premium at ₹632 on the BSE, against an issue price of ₹614 .
This fell significantly short of the Grey Market Premium (GMP) of ₹41, which hinted at a ₹655 listing . Early surges to ₹652 (NSE) and ₹649.15 (BSE) offered hope, but the stock closed near ₹624–625, settling at a mere 1.6–1.8% premium by day’s end .
Investor Gains Per Lot:
Lot Size: 24 shares
Cost per Lot: ₹14,736 (₹614 x 24)
Value at Opening (NSE): ₹15,216
Net Gain: ₹480 (3.3%) if sold at the NSE open
Behind the Numbers: Why the Muted Response?
Despite roaring subscription numbers, three factors dampened the listing:
Policy Dependency Jitters: 87.3% of Oswal’s revenue relies on the PM-KUSUM solar subsidy scheme. Investors fear budget cuts or policy shifts .
Government Payment Delays: Trade receivables ballooned to ₹711 crore (9M FY25) due to slow government processing, straining cash flow .
Growth Sustainability Doubts: Spectacular revenue jumps (96% YoY in FY24) and PAT surges (185%) 110 left analysts questioning if this pace is replicable without KUSUM .
The Bull Case: Why Analysts Say “Hold for the Long Game”
Despite the lukewarm debut, heavyweight brokerages like Mehta Equities and Hensex Securities advocate holding or accumulating shares. Here’s why:
1. Dominance in India’s Solar Pump Revolution
Installed 26,270 solar pumps under PM-KUSUM across Haryana, Rajasthan, UP, and Maharashtra.
Revenue CAGR of 45.1% (FY22–FY24) 8, dwarfing sector averages.
Plans to backward-integrate into solar module manufacturing, boosting margins.
2. Financial Firepower Post-IPO
Debt Reduction: ₹280 crore of IPO proceeds will slash net debt (₹339 crore), freeing cash flow .
Margin Surge: EBITDA margins exploded from 10.7% (FY22) to 30.1% (9M FY25) .
Expansion Fuel: New manufacturing plants in Karnal, Haryana, funded by IPO capital .
3. Policy Tailwinds & Export Ambitions
Alignment with India’s solar energy targets and rural electrification missions.
Exports to 17 countries, with anti-dumping duties in Southeast Asia creating new opportunities.
Red Flags: Risks You Can’t Ignore
| Risk Factor | Impact | Mitigation Outlook |
|---|---|---|
| PM-KUSUM Dependence | 87.3% revenue exposure; scheme cuts could crash growth | Diversifying into industrial/export markets |
| Geographic Concentration | 79% revenue from Haryana & Maharashtra | Expanding pan-India tenders |
| Raw Material Volatility | Copper/solar cell price swings threaten margins | Hedging strategies; vertical integration |
| Stretched Receivables | ₹711 crore dues (9M FY25); impacts working capital | Faster government clearance expected post-elections |
Expert Verdict: Should You Buy, Hold, or Sell?
Short-Term Traders: “Book partial profits near ₹675” – Mahesh M. Ojha, Hensex Securities 27. The 3% listing gain disappointed many seeking 10–15%.
Long-Term Investors: “HOLD” – Prashanth Tapse, Mehta Equities 14. Accumulate if dips below ₹610 amid market volatility.
New Investors: Wait for Q1 FY26 results (due Aug 2025) to clarify receivable trends and post-KUSUM strategy.
12–18 Month Price Target: ₹700–750 (14–22% upside)
Peer Comparison: Is Oswal Undervalued?
| Company | P/E Ratio | Market Cap (₹ Cr) | Key Strength | |
|---|---|---|---|---|
| Oswal Pumps | 24.0 | 7,124 | Solar pump market leader | |
| Shakti Pumps | 66.72 | 9,450 | High export focus | |
| Kirloskar Bros | 41.94 | 12,890 | Diversified industrial | |
| KSB Ltd | 66.79 | 8,320 | Global footprint |
Oswal trades at a discount to peers due to policy risks, but offers higher growth potential if execution continues.
The Bottom Line: Patience Over Panic
Oswal Pumps’ IPO debut felt more like a damp squib than fireworks. Yet, beneath the modest 3% listing gain lies a company turbocharged by India’s renewable energy shift. For investors:
🔸 Hold if allotted – solar irrigation is a megatrend.
🔸 Buy dips below ₹610 – valuation looks compelling.
🔸 Watch receivables and policy cues – these are the swing factors.
As Vivek Gupta, CMD, stated post-listing: “Our focus is on leveraging India’s $12B solar pump opportunity beyond KUSUM” . If executed, this could make today’s lukewarm debut a forgotten prologue.