Omnitech Engineering IPO: 10 key things to know from the RHP ahead of offer launch on Wednesday

Omnitech Engineering IPO: The initial public offering (IPO) of Omnitech Engineering is set to open for public subscription on Wednesday, February 25, and will remain so until Friday, February 27. The book build issue is a combination of fresh issue of 1.84 crore shares and an offer for sale (OFS) of 73 lakh shares. With a price band set at ₹216 to ₹227 per share, the issue aims to raise ₹418 crore from the fresh issue of shares.

Share allotment is expected to be finalised on Monday, March 2, and shares of the company will list on the BSE and the NSE on Thursday, March 5.

Meanwhile, Omnitech Engineering's IPO GMP on Monday, February 23, was ₹7. This suggests the stock could be listed at ₹234, with a 3% premium.

Omnitech Engineering IPO: 10 things from RHP

Ahead of the IPO this week, here are the 10 key things that investors should know about the share sale from the RHP:

1. IPO details

The mainboard issue combines a fresh issue of ₹418 crore and an offer for sale of ₹165 crore. Thus, the total issue size is ₹583 crore. Udaykumar Arunkumar Parekh is the promoter selling shareholder in the OFS.

2. Omnitech Engineering IPO book-running lead managers and registrar

Equirus Capital Private Limited and ICICI Securities Limited are the book-running lead managers, and MUFG Intime India Private Limited is the registrar of Omnitech Engineering IPO.

3. Omnitech Engineering IPO objects

The company intends to use the net proceeds from the issue for the repayment and/or pre-payment of certain outstanding borrowings, setting up of new manufacturing facilities at Rajkot, Gujarat, capital expenditure requirements for the purchase and installation of solar panels, and for general corporate purposes.

4. Omnitech Engineering business

The company manufactures high precision engineered components and assemblies, supplying to global customers across industries such as energy, motion control and automation, industrial equipment systems, metal forming and other diversified industrial applications.

5. Omnitech Engineering financial performance

The company's profit for FY23 was ₹322.92 million, which fell to ₹189.08 million and jumped to ₹438.65 million.

The company's revenue from operations for FY23 was ₹1,773.31 million, which increased to ₹1,781.80 million in FY24, and to ₹3,429.13 million in FY25.

6. Omnitech Engineering management

The company's board comprises seven directors, of whom two are executive directors, one is a non-executive director, and four are independent directors, including one independent woman Director.

Udaykumar Arunkumar Parekh, 46, is the Chairman and Managing Director of the company.

7. Omnitech Engineering peers

Azad Engineering Limited, Unimech Aerospace and Manufacturing Limited, PTC Industries Limited, MTAR Technologies Limited, and Dynamatic Technologies Limited are the listed peers of the company.

8. Precision-engineered goods market to see healthy growth in India

As per the RHP, in 2024, the precision-engineered goods market in India stood at $7.1 billion, exhibiting a CAGR of 7.1% during the period of 2018 to 2024. Going forward, by 2028, this segment is projected to reach a value of $11.1 billion, representing a CAGR of 11.5% from 2025 to 2028.

9. Concentration of key customers is a key risk

The company generates significant revenues from its top 10 customers. The loss of such customers or a significant reduction in its revenue from such customers will have a material adverse impact on the business.

10. Tariff risk

According to the RHP, tariffs or other anti-outsourcing legislation may adversely affect the company's pricing and volume of work and have an overall negative impact on the business, financial condition and results of operations.

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