NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Anand Rathi Report
Omnitech Engineering IPO: Key Details
- Omnitech Engineering Ltd. launched its initial public offering (IPO) today February 25 and the offer closes for subscription on Feb 27.
- The company has fixed the price band in the range of Rs 216 to Rs 227 per share.
- The company is a manufacturers of high-precision engineered components and assemblies, serving global customers across diverse industries.
- The Omnitech Engineering IPO is a book build issue worth Rs 583 crore. It comprises a fresh issue of 1.84 crore shares, amounting to Rs 418 crore, and an offer-for-sale (OFS) of 73 lakh shares, worth Rs 165 crore.
- To participate in the IPO, retail investors need to bid for a single lot size of 66 shares, requiring an investment of Rs 14,982.
- Equirus Capital Private Ltd., ICICI Securities Ltd. are the book running lead managers tof the issue while MUFG Intime India Ltd. is the registrar to the offer.
- Shares of Omnitech Engineering are scheduled to be listed on the BSE and NSE on March 5.
8. Objects of the Issue:
- Repayment and / or pre-payment, in full or in part, outstanding borrowings.
- Setting up new projects ( manufacturing facilities) of the company (‘proposed facilities'),
- Funding capital expenditure requirements for purchase and installation of solar panels, and, purchase of new equipment / machinery for, existing manufacturing facility (‘existing facility 2').
9. Strengths:
- Strong relationships with marquee customers spread across a wide array of end-user industries, with stringent qualification processes.
- Operations supported by the company's manufacturing facilities, offering scale, flexibility and locational advantage.
- Diversified product portfolio enabled by product development capabilities.
- Experienced promoter and management team with strong domain expertise.
10. Key Risk:
- The top five customers contributed 40.02% of revenue in the six months ended September 30, 2025, 31.75% in FY2025, 42.32% in FY2024 and 49.79% in FY2023. Any loss of, or reduction in business from, key customers could materially impact revenues, margins and capacity utilization.
- The company operates a capital-intensive CNC-based manufacturing model, with a significant portion of fixed assets invested in plant and machinery, resulting in high operating leverage. Any decline in volumes or sub-optimal utilization of manufacturing capacity could adversely affect profitability.
- All manufacturing operations, including proposed facilities, are located in Rajkot, Gujarat, exposing the company to geographic concentration risk. Any disruption due to natural calamities, infrastructure bottlenecks, labour issues or regulatory actions in this region could materially impact operations.
- The company is entirely dependent on third-party logistics providers. Transportation, freight and forwarding expenses constituted 3.42% (H1 FY26), 3.69% (FY25), 2.90% (FY24) and 3.88% (FY23) of total expenses. Any disruption in logistics services could impact timely delivery and customer satisfaction.
- The company has significant foreign currency exposure. Revenue from operations outside India constituted 78.98% in H1 FY26, 74.95% in FY2025, 72.97% in FY2024 and 75.12% in FY2023. Adverse exchange rate movements could negatively impact margins and financial performance.
- The company incurred negative net cash flows from operating activities of Rs 689.85 million in FY2025. Although operating cash flows turned positive at in H1 FY26, recurrence of negative cash flows could adversely impact company operations.
- Raw materials such as steel, alloys and specialised metals form a substantial part of the cost structure. Cost of materials purchased from outside India constituted 37.29% (H1 FY26), 42.21% (FY25), 8.04% (FY24) and 4.30% (FY23) of total materials purchased. Any increase in raw material prices or supply disruptions, could adversely impact margins.
Valuation:
Omni Tech Engineering is among India's fastest-growing manufacturers of high-precision engineered components and assemblies, serving global customers across diverse industries. 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.
Therefore, with strong customer stickiness, with repeat orders accounting for over 85% on average and diversified global customer base Anand Rathi believes, the company might showcase revenue visibility over long run. Hence, assigns Subscribe-long Term rating for the issue.
Click on the attachment to read the full report:
ALSO READ: PNGS Reva Diamond Jewellery IPO Day Two: Check Subscription Status, Issue Details, GMP, And More
ALSO READ: Accord Transformer & Switchgear IPO: GMP Signals 18% Premium — What Investors Should Know
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
