IPO closes on 27 Feb'26
Omnitech Engineering Ltd
Minimum Investment
₹ 14,982 / 66 shares
Our Verdict:
Avoid
- Omnitech Engineering Ltd (OEL) has delivered strong operating performance, with operating margins exceeding 30%, broadly in line with established precision engineering peers.
- Return ratios remain healthy and revenue growth has been robust, with FY25 revenue rising 92% year-on-year.
- The valuation appears reasonable relative to larger listed peers such as Azad Engineering and MTAR Technologies, offering a potential growth-at-a-reasonable-price opportunity.
- However, leverage remains elevated, with a debt-to-equity ratio of 1.60x, which warrants close monitoring. A meaningful improvement in cash flow conversion and sustained deleveraging will be critical for any potential re-rating.
- Additionally, the company has significant exposure to North America, with 59.88% of H1FY26 revenue derived from customers in the region. Any adverse tariff changes or trade disruptions could negatively impact demand and margins.
- Given the current financial profile and prevailing cautious market sentiment, it would be prudent to refrain from subscribing at this stage and instead monitor the company’s post-listing execution closely.
About the company
Founded in
9 Aug'21
Managing director
Udaykumar Parekh
- OEL manufactures high-precision engineered components, with integrated capabilities across design, machining, fabrication and assembly. It serves a diversified global customer base across energy, motion control and automation, industrial equipment systems and metal-forming sectors. Its products cater to critical applications such as drilling equipment, robotics, mining systems and hydraulic components.
- The company operates three manufacturing facilities in Rajkot, Gujarat, with a combined installed annualised machining capacity of approximately 2.42 million machine hours and an annualised fabrication capacity of 7,200 MTPA.
STRENGTHS
- Financial Performance: OEL has delivered strong growth between FY23 and FY25, recording a CAGR of 39% in operating revenue, 36% in EBITDA and 17% in net profit, reflecting operating scale-up and improving profitability.
- Global Footprint: The company serves a diversified, export-led client base of 256 customers across 24 countries. With Europe and North America accounting for a significant share of the global precision engineering market, its established presence in North America, along with the recent free trade agreement between India and the European Union, may provide incremental export tailwinds.
- Solid Order Book: The company’s Rs 1,765 crore order book provides reasonable medium-term revenue visibility and underpins growth prospects.
- Sticky Customer Relationships: The top 10 and top 20 customers have an average relationship tenure of 2.9 years and 3.8 years, respectively, indicating reasonable client stickiness. As of H1FY26, repeat customers stood at 107, contributing nearly 97% of operating revenue.
RISK FACTORS
- Client Concentration: OEL has a high dependence on a limited set of customers. In H1FY26, the top 10 customers contributed 56% of total revenue, while the top 3 customers accounted for 30%. The loss of any key customer could materially affect revenue, cash flows and overall operations.
- Order Concentration: The order book of Rs 1,764.78 crore includes a single order of Rs 1,038.87 crore from one customer. Any cancellation, deferment or renegotiation of this order could adversely impact revenue visibility, growth prospects and business performance.
- Elevated Leverage: Total borrowings stood at Rs 382.91 crore as of September 30, 2026, with a debt-to-equity ratio of 1.6x, which is relatively high. Any weakening in cash flows may increase pressure from interest costs and impact profitability.
- Working Capital Intensity: The company operates with materially stretched working capital days (283 days as of FY25), leading to negative operating cash flows and continued reliance on external funding. Although Rs 50 crore from the IPO proceeds is earmarked for debt reduction, leverage levels are expected to remain elevated in the near term.
- Export Dependence: The company has meaningful exposure to North America, with supplies to customers based in the region contributing 59.88% of revenue in H1FY26. Any adverse tariff changes, regulatory shifts or trade disruptions could impact demand and margins.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 583 crore
Fresh Issue
₹ 418 crore
OFS
₹ 165 crore
Price range
₹ 216 - 227
Lot size
66 shares
Issue Objective
The net proceeds from the fresh issue are proposed to be utilised for the following purposes:
- Repayment and or prepayment of certain outstanding borrowings availed by the Company;
- Setting up new projects at Proposed Facility 1;
- Setting up new projects at Proposed Facility 2;
- Funding capital expenditure at Existing Facility 2; and
- General corporate purposes.
Dates
Bidding open
25 Feb'26
Bidding close
27 Feb'26
Allotment date
2 Mar'26
Refund date
4 Mar'26
Listing
5 Mar'26
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2026 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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