Oswal Pumps Limited, one of India’s leading manufacturers of solar pumping systems, solar modules and electric motors has announced plans to establish a 1.2 GW solar cell manufacturing facility through its wholly owned subsidiary, Oswal Solar Energy Private Limited (OSEPL). The subsidiary’s Board of Directors has approved the proposed facility, which will use TOPCon (Tunnel Oxide Passivated Contact) technology.
Commercial production at the facility is expected to begin by April 2028. The entire output is intended for captive consumption at OSEPL’s in-house solar module manufacturing lines. The proposed facility aims to ensure a steady and reliable supply of domestic content requirement (DCR) cells while reducing the company’s exposure to spot-market price fluctuations and supplier-driven commercial terms. The move will also expand OSEPL’s operations beyond module assembly into solar cell manufacturing. Over time, these advantages are expected to strengthen the group’s cost structure, improve its competitive position in government-backed programmes and support profitability at the consolidated level.
Key benefits to Oswal Pumps
- ALMM List-II compliance: Assured access to ALMM-compliant domestic cells for modules supplied under PMKUSUM, PM Surya Ghar, rooftop and other government-linked projects, protecting the company’s order book eligibility.
- Security of supply: Reduced dependence on third-party and imported cells at a time when domestic cell availability is constrained
- Cost competitiveness: Lower input costs and freight, strengthening the company’s position in price-competitive government tenders
- Technology leadership: TOPCon cells deliver higher efficiency and energy yield, enabling higher-wattage, premium modules
- Quality control: End-to-end control of cell and module quality, improving reliability and warranty performance of solar pumping systems
- Execution agility: Faster turnaround on large orders, supported by in-house supply of cells and modules
The proposed 1.2 GW solar cell manufacturing facility is estimated to cost approximately ₹456 crores. Of this, around ₹296 crores is expected to be financed through debt, while ₹159.85 crores is proposed to be funded from the company’s unutilized IPO proceeds of ₹163.04 crores.
The IPO proceeds were originally earmarked for three projects: the Aluminium Frame Facility, the remaining 300 MW EVA Encapsulant Facility and the remaining 500 MW Solar Module Facility. The company now proposes to redirect ₹159.85 crores towards the solar cell manufacturing project, with utilization planned by FY 2028.
At its board meeting held recently, the company approved the proposed changes to the objects and terms of utilization of the IPO proceeds, along with a revision to the utilization timeline. The changes remain subject to the necessary statutory and regulatory approvals, including shareholder approval.
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Strategic Rationale
Oswal Pumps’ proposed investment in solar cell manufacturing is driven by the need to secure a more reliable supply of cells and reduce its exposure to external suppliers. According to the company, the pricing offered by domestic cell suppliers and their upfront security deposit requirements have made external procurement less attractive. Dependence on third-party suppliers also exposes the business to spot-market price fluctuations and potential supply constraints, particularly for modules used in government-backed schemes that require compliance with Domestic Content Requirements (DCR).
The proposed 1.2 GW TOPCon solar cell facility is expected to meet approximately 75% of Oswal Solar Energy Private Limited’s cell requirements, with the remaining demand sourced externally in the near term. By bringing cell manufacturing in-house, the company aims to strengthen supply security, improve control over input costs and production schedules, and build a more integrated solar manufacturing business.
The company’s decision to prioritize solar cell manufacturing over additional capacity in solar modules, aluminium frames and EVA encapsulants reflects its assessment of where investment can address a more critical supply chain requirement. Oswal Pumps believes that securing cell supplies offers greater strategic value than expanding capacity in components or manufacturing stages that are not currently the primary constraint on its operations.
The proposed reallocation of ₹159.85 crore from unutilized IPO proceeds towards the project is intended to align capital expenditure with these priorities. Subject to the necessary statutory and regulatory approvals, the investment is expected to strengthen operational control and support long-term cost competitiveness. The extent to which these benefits translate into improved margins will depend on project execution, production costs, market conditions and the utilization of the new facility.
- Versus further module capacity: the Company’s existing and planned module lines (the 570 MW line plus the 1 GW now being set up) are sufficient for current requirements; adding further module capacity would deepen, the Company’s exposure to externally-sourced, DCR-constrained cells.
- Versus continuing the Aluminium Frame Facility: Frames are low-value, standardized components that can be sourced from the market in the near term. With frame technology still evolving, investing in manufacturing capacity now carries a risk of obsolete capex. In contrast, cells are critical to securing supply and protecting margins, making them the most important area for investment in the value chain.
- Versus building out the balance of the EVA Encapsulant Facility: the 1.2 GW of EVA capacity being retained is majorly sufficient to service the Company’s module-manufacturing capacity with only a small incremental quantum expected to be sourced externally; committing capital to the balance 300 MW would tie up funds in an encapsulant-manufacturing step that is not the binding constraint on the Company’s solar-manufacturing economics, unlike cells.
The company believes that reallocating the funds from the three previously identified projects to solar cell manufacturing will better align its capital expenditure with current business priorities. While the existing plans relate to areas where additional investment is considered less critical, the proposed cell facility is intended to address a key supply chain requirement and strengthen OSEPL’s integrated manufacturing capabilities. The company expects this investment to deliver greater value than expanding module capacity or setting up a conventional aluminium frame manufacturing line.
Management reiterated its commitment to creating long-term shareholder value through disciplined capital allocation and the efficient utilization of IPO proceeds. The proposed investment is aimed at improving returns while continuing to uphold the quality of the company’s products and services.
Commenting on the order, Mr. Vivek Gupta, Chairman and Managing Director, Oswal Pumps Limited said:
“The decision to set up a 1.2 GW TOPCon solar cell facility marks a defining step in Oswal Pumps’ journey from a pump manufacturer to a fully integrated solar solutions company. Over the years, we have built strong capabilities in solar modules, pumps and complete solar pumping systems. Bringing cell manufacturing in-house completes that value chain and gives us greater control over quality, cost and timelines.
With ALMM List-II now in force, demand for domestically manufactured cells is set to rise sharply. We see this as the right opportunity to invest. Choosing TOPCon technology ensures we are building for the future, with higher efficiency and better long-term performance for our customers.
India’s renewable energy ambitions, together with programmes such as PM-KUSUM and PM Surya Ghar, give us strong visibility of demand. We are confident this investment will strengthen our competitive position and create long-term value for all our stakeholders.”
