Oswal Pumps shares list at 3% premium; should you buy, sell or hold?

Oswal Pumps IPO listing: Shares of Oswal Pumps made a lacklustre debut on the bourses on Friday, 20 June, following the completion of its initial public offering (IPO). On the National Stock Exchange (NSE), Oswal Pumps shares listed at ₹634 apiece, reflecting a premium of ₹20 or 3.26 per cent over the issue price of ₹614.
Oswal Pumps shares listed at a slightly lower premium on the BSE, at ₹632 apiece, up ₹18 or 2.93 per cent from its issue price.
However, the listing came below the grey market estimates. Ahead of their market debut, the unlisted shares of Oswal Pumps were quoted at around ₹655 per share, reflecting a grey market premium (GMP) of ₹41 or 6.68 per cent over the issue price of ₹614, according to sources tracking unofficial market activities.
Should you buy, sell or hold Oswal Pumps shares?
For allotted investors, Prashanth Tapse, senior Vice President (Research) at Mehta Equities, advises to hold the comapny's shares for the long term, citing the company's strong positioning to benefit from structural growth drivers in the agriculture and infrastructure sectors. "We see the company's strategic positioning as advantageous, especially in light of ongoing government initiatives in infrastructure and rural development, with a particular focus on water management and irrigation. We view Oswal Pumps as a compelling long-term investment opportunity, well-aligned with the government's continued emphasis on rural electrification and the promotion of solar-powered irrigation systems," said Tapse.
For non-allotted investors, Tapse suggests considering accumulating on any dips post-listing, particularly if broader market sentiment results in short-term volatility. 'The business offers a strong combination of sectoral tailwinds and value-based fundamentals,' he added.
Oswal Pumps IPO details
The public offering of Oswal Pumps is a book-building issue valued at ₹1,387.34 crore, comprising a fresh issue of 14.5 million equity shares and an offer for sale (OFS), with promoter Vivek Gupta divesting up to 8.1 million equity shares.
Oswal Pumps IPO was available for subscription from Friday, 13 June, to Tuesday, 17 June, at a price band of ₹584–614 per share, with a lot size of 24 shares. The basis of allotment of company's shares was finalised on Tuesday, 18 June. Oswal Pumps has set the issue price at ₹614 per share.
The company will not receive any proceeds from the OFS. 'The Promoter Selling Shareholder will be entitled to the proceeds from the sale of the Offered Shares in the Offer for Sale, net of the offer-related expenses and relevant taxes thereon,' Oswal Pumps said in its Red Herring Prospectus (RHP).
The company, however, intends to utilise the proceeds from the fresh issue for funding certain capital expenditure, investing in its wholly-owned subsidiary, Oswal Solar, through equity, funding the establishment of new manufacturing units in Karnal, Haryana, and for pre-payment/repayment, in part or full, of certain outstanding borrowings availed by the company.
The company will also utilise the fresh proceeds for investment in its wholly-owned subsidiary, Oswal Solar, through equity, for repayment/prepayment, in part or full, of certain outstanding borrowings availed by Oswal Solar, and for general corporate purposes.
MUFG Intime India (formerly Link Intime) serves as the registrar for the public offering of Oswal Pumps, while IIFL Capital Services, Axis Capital, CLSA India, JM Financial, and Nuvama Wealth Management are the book-running lead managers.
About Oswal Pumps
Oswal Pumps manufactures and distributes a diverse range of pumps for domestic, agricultural, and industrial applications. The company has executed orders for 26,270 turnkey solar pumping systems under the PM-KUSUM Scheme for several Indian states. Oswal Pumps operates a manufacturing facility in Karnal, Haryana, and has a growing network of distributors across India. The company exports its products to 17 countries across the Asia-Pacific, Middle East, and North Africa regions.

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