Omnitech Engineering IPO

Omnitech Engineering Limited is a Gujarat-based precision engineering and manufacturing company with nearly two decades of operational history. The company specializes in high-precision engineered components and assemblies catering to diversified industrial applications across domestic and international markets.

Inception & Corporate Evolution

This long evolution reflects a steady scale-up from promoter-driven operations to institutional readiness, culminating in a public market listing.

Registered & Corporate Office

• Location:
  Plot No. 2500, Kranti Gate Main Road,
  GIDC Lodhika Industrial Estate,
  Metoda, Rajkot – 360021, Gujarat, India

This location provides strategic proximity to auto, engineering, and export clusters in western India.

Industry & Sector Classification

Products & Services Offered

Omnitech operates on a build-to-specification model, creating high switching costs for customers.

Industry Description

Omnitech operates within the precision engineering and industrial manufacturing ecosystem, supplying critical components used in sectors such as:

• Automotive and EV components

• Industrial machinery

• Capital goods

• Engineering exports

Market Size & Growth Outlook (India)

The RHP highlights India’s rising role as a global precision manufacturing hub, driven by cost competitiveness and skilled labor availability.

Regulatory Environment

The industry is regulated through:

• Companies Act, 2013

• SEBI ICDR Regulations, 2018

• Environmental & factory regulations

• Export-import and customs laws

Overall, regulation is compliance-heavy but not restrictive, favoring organized players.

Future Outlook

• Increasing outsourcing by global OEMs

• Higher demand for quality-certified vendors

• Consolidation benefiting mid-to-large organized manufacturers

What the Company Does

Omnitech designs, manufactures, and supplies precision-engineered components and assemblies used in mission-critical industrial applications.

Target Customers

Value Chain Position

Omnitech sits in the mid-to-high value segment of the manufacturing chain:

Raw Materials → Precision Machining → Assembly → Quality Testing → OEM Supply

This positioning allows for:

• Better pricing power

• Sticky customer relationships

• Higher entry barriers for competitors

The company confirms full compliance with all applicable laws as per RHP disclosures.

Key Business Risks

Operational Risks

• High precision manufacturing requires skilled manpower

• Quality failures may impact customer relationships

Financial Risks

• Working capital intensive business

• Dependence on bank borrowings

Promoters

The promoters bring over 18 years of hands-on industry experience and remain deeply involved in strategic and operational decision-making.

These entities support international operations and technology services, strengthening the group ecosystem.

Key Managerial Personnel

The leadership structure blends founder control with professional management oversight.

Board Structure

• Executive Directors

• Independent Directors

• Non-Executive Directors

Statutory Committees

The governance framework is SEBI-compliant and listing-ready.

Outstanding Litigation Overview

As disclosed in the RHP, the company, its promoters, and subsidiaries are subject to routine litigations typical for manufacturing businesses. Importantly, no litigation threatens the company’s going concern status.

Litigation Classification

Key Insight:
The RHP explicitly states that no material litigation is expected to have a material adverse impact on financials or operations.

Key Approvals & Licenses

The company confirms that all material approvals necessary for operations are in place.

Debt Profile Summary

Key Observations

• Borrowings are secured

• Utilized primarily for capacity creation and working capital

• No defaults reported

The IPO proceeds will partially reduce leverage, improving debt ratios.

Cash Flow Summary

Key Insight

Operating cash flows remain positive and sustainable, while investing cash outflows align with growth strategy.

Statement of Profit & Loss (Consolidated)

Revenue, Profitability & Earnings

Key Takeaway:
Revenue nearly doubled in FY25 (↑92.45% YoY), with margins remaining sector-leading despite scale-up.

Statement of Assets & Liabilities (Consolidated)

Balance Sheet Snapshot

Key Takeaway:
The balance sheet has scaled 4× in 3 years, driven by asset creation and retained earnings.

Net Worth & Capital Structure

*Not annualised for 6M FY26

Earnings Per Share (₹)

(Adjusted for bonus issue & split, FV ₹5)

Cash Flow Summary (Consolidated)

Key Takeaway:
Operating cash flows are consistently positive and strong, fully funding capex over the cycle.

Financial Quality Summary

Profitability Ratios

*6M FY26 ratios are not annualised

Insight:
Even after scale-up, Omnitech maintains industry-leading margins for a precision engineering company.

Liquidity Ratios

Insight:
FY24 saw temporary stress due to expansion; liquidity normalized strongly in FY25.

Leverage Ratios

Insight:
Leverage peaked during capex years and is expected to decline post-IPO with debt repayment.

Efficiency Ratios

Insight:
Lower turnover ratios reflect higher scale, exports, and longer OEM credit cycles, typical for this industry.

Earnings Ratios

(FY23 EPS adjusted for split & bonus for comparability)

Return & Capital Quality Snapshot (FY25)

Management’s View on Performance

Management attributes performance growth to:

• Strong export demand

• Long-term OEM relationships

• Process automation and quality control

Growth Strategy

Objects of the Offer – Fresh Issue

Strategic Impact

The IPO is growth-oriented, not promoter exit–driven (OFS is partial).

Pricing Determination

The issue price will be determined through:

• Book building process

• Peer comparison

• Earnings & net worth analysis

Valuation Metrics Considered

Equity Share Capital (Face Value ₹5)

The company undertook:

• Share split (₹10 → ₹5)

• Bonus issue (1:9)
  to align capital structure for public listing.

Pre-Issue Shareholding

Post-Issue (Expected)

*Exact percentages depend on final issue size and allocation.

Company’s Stated Policy

• No dividend declared in last 3 financial years and 6M FY26

• Focus on retaining profits for growth and debt reduction

• Dividends, if any, will depend on:

  • Profitability

  • Cash flows

  • Capex requirements

  • Board approval

Key Rights

Mandatory Disclosures Covered

• SEBI ICDR compliance

• Ind AS–compliant financials

• Auditor reports

• Risk factor disclosures

• Capital structure history

• Promoter background checks

A. Promoters & Key Managerial Personnel (KMP)

B. Subsidiaries & Group Entities

Loans, Advances & Outstanding Balances (₹ million)

A. Loans & Recoverables from Subsidiaries

Nature:

• Strategic funding for overseas marketing, warehousing, and liaison operations

• Software subsidiary funding for operational setup

Investor View:
These are business-support loans, not promoter personal loans.

B. Outstanding Payables to Subsidiaries

Nature:
Reimbursement of marketing, logistics, and customer-interface costs incurred by the US subsidiary.

Trend Insight:
Rising balance aligns with rapid export growth, not governance concern.

Managerial Remuneration (₹ million)

Remuneration to Promoter Director / KMP

Includes ₹2.43 million during part-year appointment and full-year compensation thereafter.

Key Point:

• Remuneration is within Companies Act limits

• Approved by Board & Nomination Committee

Guarantees & Security Provided

Investor Interpretation:
Promoters have skin in the game, backing company borrowings personally.

Nature of Related Party Transactions – Summary

Compliance & Governance Confirmation

• All related party transactions:

  • Disclosed as per Ind AS 24

  • Approved by Audit Committee

  • Reported in RHP & financial statements

• No transaction is:

  • With promoter personal entities

  • Non-business in nature

  • Adverse to minority shareholders