Om Power Transmission IPO closes today: Should you subscribe? Check expert view, GMP and more

Om Power Transmission's IPO closes for subscription today, April 13.

On Friday, the second day of the issue, the IPO was subscribed 71 percent overall, indicating a steady pickup in demand from the opening day. The issue, which opened on April 9, saw improved traction, particularly from retail investors.

As per BSE data till Day 2, the Qualified Institutional Buyers (QIBs) portion was subscribed 1.18 times, while Non-Institutional Investors (NIIs) booked 0.38 times. Retail Individual Investors (RIIs) showed better momentum at 0.58 times.

The IPO had garnered 39 percent subscription on Day 1, led largely by QIB demand.

Ahead of the issue opening, the company raised Rs 45.01 crore from anchor investors. Mauritius-based Craft Emerging Market Fund PCC, through its Elite Capital Fund and Citadel Capital Fund, picked up 16.57 lakh shares worth over Rs 29 crore. Morgan Stanley Asia (Singapore) acquired 5.71 lakh shares for Rs 10 crore, while Sunrise Investment Trust bought 3.43 lakh shares valued at Rs 6.01 crore.

Om Power Transmission operates in the engineering, procurement and construction (EPC) segment, focusing on power transmission infrastructure, and has over 14 years of experience in the sector.

According to its red herring prospectus (RHP), its listed peers include Rajesh Power Services Ltd (P/E of 16.38), Advait Energy Transitions Ltd (P/E of 57.52), and Viviana Power Tech Ltd (P/E of 25.15).

The IPO allocation structure earmarks up to 50 percent of the issue for QIBs, at least 15 percent for NIIs, and a minimum of 35 percent for retail investors.

In the grey market, the GMP stood at Rs 2, as per latest investorgain.com data. Based on the upper price band of Rs 175, the estimated listing price is around Rs 177, indicating a potential gain of about 1.14 percent per share.

The basis of allotment is likely to be finalised on April 15. Refunds are expected to be initiated on April 16, with shares credited to demat accounts on the same day. The stock is tentatively scheduled to list on the BSE and NSE on April 17.

As the Iran-US tensions see fresh escalation, the big question is should you subscribe to this IPO?

SBI Securities has given a thumbs up to this public issue.

"OPTL (Om Power Transmission) is a power transmission infrastructure EPC company with proven capabilities in executing HV and EHV transmission lines, substations, and underground cabling projects on a turnkey basis, along with comprehensive O&M services," SBI Securities said.

Talking about the company's financial health, SBI Securities said, "the company has demonstrated healthy financial performance, with Revenue/EBITDA/PAT growing at a CAGR of 52%/73%/88% to Rs 279 crore/Rs 34 crore /Rs 23 crore respectively between FY23-25."

"Further, the company is well placed to capitalize on strong sector tailwinds, with India's power generation and transmission market expected to expand from USD 125 bn in FY24 to USD 280 billion by FY30P, growing at a CAGR of 14.4%. Additionally, the company also plans to repay its borrowings partially to the tune of Rs 25 crore, which will aid in savings of finance costs and boost profitability," SBI Securities further added.

Talking about the IPO, SBI Securities said that, "At the upper price band of Rs 175, the issue is valued at a P/E of 27.1x/19.2x based on FY25 and annualized 9MFY26 earnings, respectively, on a post-issue basis. We recommend investors to SUBSCRIBE to the issue at the cut-off price for a long-term investment horizon."