Omnitech Engineering ltd

Omnitech Engineering Limited , offering investors a chance to participate in India’s high-precision engineering and "Make in India" export story. Based in Rajkot, Gujarat, the company is a critical supplier for global giants in energy, aerospace, and industrial automation.

Here is a detailed breakdown of the IPO for your investment blog.

Omnitech Engineering IPO: Key Details

• IPO Dates: February 25 – February 27, 2026

• Price Band: ₹216 to ₹227 per equity share

• Lot Size: 66 Shares (Minimum investment of ₹14,982)

• Total Issue Size: ₹583 crore

  • Fresh Issue: ₹418 crore (To fund expansion and debt repayment)

  • Offer for Sale (OFS): ₹165 crore (Promoter stake sale)

• Listing Date: March 5, 2026 (NSE & BSE)

Business Overview: The Precision Play

Omnitech specializes in manufacturing high-precision engineered components and assemblies. These are not your average nuts and bolts; they are safety-critical parts weighing anywhere from 3 grams to 500 kg, used in massive industrial machines, aircraft, and energy plants.

Core Segments & Reach

The company operates three advanced facilities in Gujarat equipped with CNC, VMC, and TMC machines.

• Global Footprint: Over 75% of revenue comes from exports to 24 countries, with a major focus on North America and Europe.

• Massive Order Book: As of late 2025, the order book stands at a staggering ₹1,764.7 crore, providing significant revenue visibility for the next 2-3 years.

• Customer Loyalty: Approximately 97% of their business comes from repeat customers, highlighting the high "switching costs" involved in precision engineering.

Financial Performance (FY25 Highlights)

Omnitech has shown explosive growth in the last fiscal year:

• Revenue Growth: Jumped 92% to ₹342.9 crore (vs ₹178.2 crore in FY24).

• Profitability: Net Profit (PAT) surged 132% to ₹43.9 crore.

• Margins: Maintains healthy EBITDA margins of approximately 33–34%.

Investment Pros & Cons

The Strengths (Pros)

1. China + 1 Tailwind: Benefit from global OEMs shifting supply chains away from China to reliable Indian manufacturers.

2. High Barriers to Entry: Getting approved as a supplier for safety-critical parts takes 8–12 months of audits and prototyping, making it hard for new competitors to enter.

3. Expansion Plans: A large portion of the IPO proceeds (₹233.5 crore) will fund two new manufacturing units, increasing capacity significantly.

The Risks (Cons)

1. Working Capital Stress: The company's cash conversion cycle is long (283 days), leading to negative operating cash flows in FY25 as they stock up for massive orders.

2. Customer Concentration: A single customer accounts for nearly 59% of the order book. Any delay from this client could impact the bottom line.

3. Geographic Risk: All manufacturing is concentrated in Rajkot; any regional disruption (like the FY25 floods) can halt operations.

Valuation: Is it worth it?

At the upper price band of ₹227, Omnitech is valued at a Price-to-Earnings (P/E) ratio of approximately 50x–53x. While this is a premium for a mid-cap firm, it is actually lower than its listed peers like Azad Engineering (103x) and MTAR Technologies (196x). Analysts generally view this as "growth at a reasonable price," though the high debt-to-equity ratio (1.65x) remains a point for monitoring