Oswal Pumps, a manufacturer of solar pumping systems, solar modules and electric motors, has announced that the Board of Directors of its wholly owned subsidiary, Oswal Solar Energy (OSEPL) has approved plans to set up a 1.2 GW solar cell manufacturing facility based on TOPCon (Tunnel Oxide Passivated Contact) technology.

The commercial production is expected to commence by April 2028. The entire output is intended for captive consumption by OSEPL's in-house solar module lines. It is intended to secure a steady, reliable supply of DCR cells and reduce the company's exposure to spot-market price volatility and supplier-driven commercial terms. It will also extend OSEPL's value addition from module assembly into cell manufacturing. Together, these benefits are expected to strengthen the group's cost structure, competitive positioning in government-backed programmes and profitability at the consolidated level over time.

The initiative is expected to benefit Oswal Pumps by ensuring access to ALMM List-II-compliant domestic solar cells for modules supplied under PM-KUSUM, PM Surya Ghar, rooftop solar and other government-linked projects, helping safeguard order book eligibility. It will also reduce dependence on third-party and imported cells amid constrained domestic availability, while lowering input and freight costs to strengthen the company’s competitiveness in price-sensitive government tenders. 

The use of TOPCon cells can deliver higher efficiency and energy yield, enabling the production of higher-wattage, premium solar modules. Additionally, end-to-end control over cell and module quality is expected to improve product reliability and warranty performance for solar pumping systems. In-house cell and module supplies can also support faster order execution and turnaround times for large projects. 

The total project cost is estimated at approximately INR 456 crore. Of this, about INR 296 crore is proposed to be funded through debt. The balance of INR 159.85 crore is proposed to be funded from the unutilised IPO proceeds of INR 163.04 crore, which were originally earmarked for the Aluminium Frame Facility, the remaining 300 MW EVA Encapsulant Facility and the remaining 500 MW Solar Module Facility through infusion in OSEPL. It is proposed to deploy the Net Proceeds towards the aforementioned solar cell manufacturing facility by Financial Year 2028.

The Board of Directors of the company in its meeting held recently, inter-alia, approved variation in the objects/ terms of utilisation of the IPO proceeds and modification of the time limit for the utilisation of the IPO Proceeds, subject to the receipt of requisite statutory/ regulatory approvals including the approval of the Shareholders of the company.

The company evaluated long-term sourcing arrangements with established domestic cell manufacturers, including multi-year off-take commitments. The commercial terms available, covering both pricing and upfront security deposit requirements, were not aligned with the company's assessment of long-term value or its approach to prudent working capital management. This puts both availability and cost of the key input outside the company's control, a strategic exposure for a business anchored to DCR-dependent programmes (PM-KUSUM, PM Surya Ghar). A comparative evaluation found that setting up captive cell manufacturing capacity was the more economically viable option.

Backward-integrating into cell manufacturing directly addresses this: it secures supply, insulates OSEPL from spot-price and deposit demands, deepens value addition from module assembly into cell manufacturing, and is expected to improve the margin and profitability at the consolidated level for the Company.

The change re-directs scarce IPO capital from a low value-add, deferrable component (frames), surplus module capacity, and surplus EVA encapsulant capacity to the highest-leverage point in the chain (cells), where control of supply is now business-critical.

At a capacity of 1.2 GW, the facility will meet approximately 75 percent of Oswal Solar Energy’s (OSEPL) overall cell requirements, with the remaining demand continuing to be met through external sourcing in the near term. The investment in cell manufacturing is prioritised over adding further module capacity, as the company’s existing and planned module lines, comprising an approximately 570 MW line and an additional 1 GW line under development, are sufficient to meet current requirements. Expanding module capacity further could increase its dependence on externally sourced cells, particularly those subject to Domestic Content Requirement (DCR) constraints.

The company has also prioritised cell manufacturing over expanding its aluminium frame facility, as frames are standardised components that can be sourced from the market in the near term. With frame technology continuing to evolve, investing in additional manufacturing capacity could carry a risk of capital becoming obsolete. In contrast, in-house cell production is expected to strengthen supply security and protect margins. Similarly, the retained 1.2 GW EVA encapsulant capacity is expected to largely meet the company’s module manufacturing requirements, with only a small additional quantity likely to be sourced externally. Investing in the remaining 300 MW of EVA capacity would therefore tie up capital in a manufacturing segment that is not considered the primary constraint on the company’s solar manufacturing economics, unlike solar cells.

All three sources involve capital allocated to lower-value activities or areas where capacity is currently sufficient. In contrast, the cell plant addresses the most critical supply-chain gap and strategic priority in OSEPL’s integrated manufacturing operations. Hence this is expected to create greater value than further investment in module capacity or a conventional aluminium-frame manufacturing line.

Commenting on the order, Vivek Gupta, Chairman and Managing Director, Oswal Pumps, 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.”