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Omnitech Engineering IPO: Omnitech Engineering Ltd, a manufacturing and engineering solutions provider, is set to launch its initial public offering (IPO) tomorrow. The public issue, aggregating to Rs 583 crore, will be structured as a book-built offering comprising a fresh issue of Rs 418 crore and an offer for sale (OFS) of Rs 165 crore. The IPO price band has been fixed at Rs 216–227 per share, with the subscription window open from February 25 to February 27, 2026.
For investors considering participation in the offering, here are key factors highlighted by SBI Securities to evaluate before subscribing to the Omnitech Engineering IPO.
Key Highlights of Omnitech Engineering IPO
SBI Securities has outlined 10 factors for investors to evaluate before subscribing:
- Strong order book visibility: The company's order book stood at nearly Rs 1,765 crore as of September 2025, offering strong near-term revenue visibility. The order book is 5.1 times FY25 revenue, providing comfort on business continuity in the near term.
- Healthy growth trajectory: The company has delivered a healthy growth trajectory, with revenue, EBITDA, and PAT clocking a CAGR of 39 per cent, 36 per cent and 17 per cent, respectively, over FY23–FY25.
- Marquee customer relationships: Omnitech Engineering has built long-standing relationships across energy, automation and industrial segments, with 107 repeat customers in 1HFY26.
- Global presence: The company serves customers in 24 countries, with nearly 60 per cent of revenue coming from the US in 1HFY26.
- Robust supply chain capabilities: To support overseas operations, the company operates a dedicated US warehouse and follows a diversified sourcing strategy to mitigate supply disruptions and manage demand volatility.
- Strong manufacturing base: The company operates three manufacturing facilities in Gujarat with significant machining and fabrication capacity. It also has plans to expand capacity further to support future growth.
- High margin profile: The company has maintained a strong margin profile, with EBITDA margins remaining in the 30–35 per cent range over FY23 to 1HFY26.
- Debt reduction post-issue: Out of the fresh issue proceeds, Rs 50 crore is earmarked for debt repayment. Post-issue, the debt-to-equity ratio is expected to reduce from 1.6x to 0.5x, strengthening the company’s balance sheet.
- Diversified end-user industries: Revenue spread across energy, motion control & automation, and industrial equipment systems.
- Long-term subscribe rating: SBI Securities recommends “SUBSCRIBE for long term” at the cut-off price, citing strong fundamentals and order visibility.
Risks Highlighted by SBI Securities
Despite the positives, SBI Securities has flagged several risks:
- Revenue concentration risk: Revenue concentration remains a key concern, as the top 10 clients contributed approximately 56 per cent of revenue in 1HFY26 and nearly 48 per cent in FY25. Any loss of key customers could materially impact the business.
- Tariff and regulatory risk: Given that nearly 79 per cent of revenue in 1HFY26 came from exports, the company is exposed to tariff and regulatory risks and changes in global trade dynamics.
- Order book uncertainty: There is also uncertainty regarding the conversion of the current order book into actual revenue, as orders can be delayed, modified or cancelled.
- Supply chain disruption risk: Supply chain disruptions and fluctuations in raw material prices could adversely affect margins and operations.
- High working capital intensity: The company operates with high working capital intensity, with net working capital days standing at 271 in FY25, which may increase liquidity and funding risks.
Funds from the fresh issue will be utilised for debt repayment, funding new projects, capital expenditure, and general corporate purposes.
With strong order visibility, healthy margins, and global presence, Omnitech Engineering’s IPO has received a “Subscribe for long term” recommendation from SBI Securities. However, investors should weigh concentration risks, export dependency, and working capital challenges before making a decision.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
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