The Omnitech Engineering IPO is currently in the spotlight. This Rs 583 crore issue by a precision engineered components maker is available for bidding till February 27. The GMP is absolutely muted and the issue has been fully subscribed already.
Are you considering this as well – Let’s take a look at the issue details, grey market, and what brokerage houses are saying-
Omnitech Engineering IPO: Dates, price band and issue size
Omnitech Engineering opened its IPO for subscription on Wednesday, February 25, and the issue will close on Friday, February 27. Investors have a three-day window to place their bids.
The company has fixed the price band at Rs 216-227 per share.
The total issue size stands at Rs 583 crore. This includes a mix of both – fresh shares worth Rs 418 crore and an offer for sale (OFS) of Rs 165 crore by promoter Udaykumar Arunkumar Parekh.
Omnitech Engineering IPO: Where will the money go?
Regarding fund utilisation, a part of the proceeds will be used to repay outstanding loans. Reducing debt is usually seen as a positive step because it lowers interest costs and improves profitability over time.
The company also plans to set up new manufacturing units.
In addition to this, funds will be used for capital expenditure, including the purchase and installation of solar panels.
The remaining amount will be allocated toward general corporate purposes.
Omnitech Engineering IPO: IPO structure – Lot size and investor quote
For retail investors, one lot consists of 66 shares, and bids must be placed in multiples of this number.
Half of the net issue is reserved for qualified institutional buyers (QIBs). Retail investors get 35% of the allocation, while 15% is reserved for non-institutional investors (NIIs), also known as high net-worth individuals.
Omnitech Engineering IPO: GMP) – What is it indicating
In the unofficial grey market, the shares of Omnitech Engineering shares are currently trading at Rs 0 premium.
This means there is no premium over the upper price band as of now.
However, it is important to understand that GMP is not an official indicator and can fluctuate based on sentiment.
Omnitech Engineering IPO: Valuation check – Expensive or Reasonable?
At the upper price band of Rs 227, the company is valued at around 50–64 times earnings, depending on the financial year considered by different brokerages.
Omnitech Engineering IPO: Avoid or Subscribe?
Here is a look at what various brokerage houses are advising on the Omnitech Engineering IPO –
SBI Securities on Omnitech Engineering IPO
SBI Securities has given a positive long-term recommendation. In its IPO note, it said, “Omnitech Engineering is a high-growth precision manufacturing company with a strong order book position of Rs 1,765 cr, thus providing strong revenue visibility for near term (5.1x of FY25 revenues). The company has demonstrated healthy CAGR in its Revenue/EBITDA/PAT of 39%/36%/17% respectively over FY23-FY25.”
They added that the “company’s D/E is expected to reduce from 1.6x to 0.5x post issue as the company will utilize Rs 50 cr towards debt repayment aiding improved profitability. At the upper price band of Rs 227, the company is valued at FY25 PE of 64.0x on post issue capital. Underpinned by leading EBITDA margin profile of 30-35% and strong order book, we recommend investors to ‘Subscribe’ for long term to the issue at cut-off price.”
Anand Rathi on Omnitech Engineering IPO
Another brokerage house, Anand Rathi, has also issued a long-term subscription rating. It stated, “On the valuation front, based on annualized FY26 earnings, the company is seeking a P/E of 50.5x times, and a post-issue market capitalization of approximately Rs 28,072 million, making the issue appears to be fully priced. While its export-led and project-based nature may result in periodic revenue volatility, the company’s focus on high-value, safety-critical applications, long customer qualification cycles, and engineering-led manufacturing model has supported healthy operating margins and repeat business.”
The brokerage therefore believes that, “with strong customer stickiness, with repeat orders accounting for over 85% on average and diversified global customer base we believe, the company might showcase revenue visibility over long run. Hence, we assign Subscribe-long Term rating for the issue.”
Angel One on Omnitech Engineering IPO
Angel One has compared Omnitech Engineering with peers such as Azad Engineering, MTAR Technologies and Unimech Aerospace.
In its report, Angel One said, “At the upper price band of Rs 227, the company is valued at a post-issue P/E of 50.5x, which appears attractive compared to peers such as Azad Engineering (103.3x), MTAR Technologies (196.8x), and Unimech Aerospace (56.7x).”
They believe that the “valuation is supported by the company’s strong growth momentum, healthy profitability profile, robust order book visibility, and upcoming capacity expansion through the setup of new plants (Proposed Facilities 1 and 2) in Rajkot, positioning it well to benefit from global supply chain diversification; hence, we assign a “Subscribe” rating to the issue.”