Omnitech Engineering Promoter Cites Strong Order Book, Expansion Plans as Key Factors in IPO Timing

Omnitech Engineering Raises Rs 583 Crore in Public Issue

Company Overview Omnitech Engineering, a leading precision engineering player, has launched a public issue to fund capacity expansion and new capabilities. The company aims to raise Rs 583 crore through a mix of a fresh issue and offer-for-sale.

Key Highlights

• Rs 1,700 crore order book, with a 90% repeat customer base and over 100 new customers added in the last three to four years
• Expansion plans include two new plants and high-end machinery to increase capacity and capabilities
• 50% of H1 revenue comes from the energy segment, with motion control and industrial equipment losing share due to faster growth in energy segment
• 63-70% capacity utilization, with new facilities expected to be ready by Q1 FY28
• High client concentration, with one customer holding Rs 1,038 crore order, but diversified revenue streams across multiple customers and product lines

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Risk Mitigation Strategies

• Diversification of revenue streams across multiple customers and product lines
• Segment-wise revenue split of 40-30-30% keeps risk profile low
• Business model based on ex-works pricing, minimizing impact of tariffs

Future Growth Plans

• Entry into defense, semiconductor, aerospace, and railways segments, aligned with Make in India initiatives
• Regular addition of new revenue streams to supplement existing segment growth

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Working Capital and Cash Flow

• Working capital has stretched from 139 days in FY23 to 283 days in FY25, but has improved to 256 days in FY26
• Operating cash flow turned negative in FY25 due to ramp-up of new plant, but expected to return to positive in FY26