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Today we are going to discuss Diffusion Engineers IPO, a company that is heading towards expansion by raising funds through the stock market. This company specializes in the production of welding strips, wires, and thick sheets, which are widely used in industrial and civil works. In this article, we will take an in-depth look at Diffusion Engineers Ltd IPO, its growth plans, and how investors can benefit from this opportunity.
Company Overview
Diffusion Engineers Ltd primarily manufactures welding strips and wires. Additionally, the company produces highly durable thick sheets that are used in civil and industrial machinery. These sheets are designed to minimize the risk of breakage, particularly when installed in large industrial equipment. Alongside this, Diffusion Engineers Ltd also focuses on creating tools and equipment for heavy machinery, which are essential for large-scale industries.
Diffusion Engineers Ltd IPO Details
Diffusion Engineers IPO is set to launch from September 26 to September 30. The cut-off price for the IPO has been set at ₹168 per share, and the company plans to raise approximately ₹8 crore through this offering. The company’s total valuation stands at ₹628 crore.
Prior to the IPO, the promoters of Diffusion Engineers Ltd held 93% ownership, which is projected to reduce to around 70% after the IPO. The funds raised through the Diffusion Engineers IPO will be a crucial driver for the company’s expansion efforts, positioning it to scale up its operations.
Diffusion Engineers IPO Details :
| Detail | Information |
|---|---|
| IPO Date | September 26, 2024 to September 30, 2024 |
| Listing Date | Friday, October 4, 2024 |
| Face Value | ₹10 per share |
| Price Band | ₹159 to ₹168 per share |
| Lot Size | 88 Shares |
| Total Issue Size | 9,405,000 shares (aggregating up to ₹158.00 Cr) |
| Fresh Issue | 9,405,000 shares (aggregating up to ₹158.00 Cr) |
| Employee Discount | ₹8 per share |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Share Holding (Pre-Issue) | 28,021,259 shares |
| Share Holding (Post-Issue) | 37,426,259 shares |
Diffusion Engineers IPO Timeline (Tentative Schedule)
| Event | Date |
|---|---|
| IPO Open Date | Thursday, September 26, 2024 |
| IPO Close Date | Monday, September 30, 2024 |
| Basis of Allotment | Tuesday, October 1, 2024 |
| Initiation of Refunds | Thursday, October 3, 2024 |
| Credit of Shares to Demat | Thursday, October 3, 2024 |
| Listing Date | Friday, October 4, 2024 |
| Cut-off Time for UPI Mandate Confirmation | 5 PM on Monday, September 30, 2024 |
Reason for Fundraising
The primary goal of Diffusion Engineers IPO in raising funds via the IPO is to enhance its manufacturing capacity. Currently, some of the company’s product lines have reached their maximum capacity, making it necessary to invest in new facilities and machinery to keep up with increasing demand. The company also plans to expand its existing factories to accommodate future production needs and manage growing expenses.
Key Information About Diffusion Engineers Ltd
Prashant Garg, the company’s leader, holds a 37% stake in Diffusion Engineers Ltd before the IPO and will continue to maintain control post-IPO. The company has no significant ongoing legal disputes, although it faces some tax-related proceedings that could present minor risks.
Founded in 1982, Diffusion Engineers Ltd initially began producing welding electrodes in 1993 and gradually diversified into the production of other products such as flux-coated wires and wear plates. The company has since become a well-recognized name in the welding industry.
Subsidiaries and Expansion
In 2012, Diffusion Engineers Ltd established its first subsidiary. Since then, it has expanded to include three major subsidiaries and several step-down subsidiaries. These subsidiaries operate both in India and in international markets, such as Singapore.
By 2017, the company had surpassed a turnover of ₹100 crore, and it is projected to reach ₹200 crore by 2024, showcasing the company’s steady growth trajectory.
Diffusion Engineers IPO Lot Size
| Application Type | Lots | Shares | Amount (₹) |
|---|---|---|---|
| Retail (Min) | 1 | 88 | ₹14,784 |
| Retail (Max) | 13 | 1,144 | ₹192,192 |
| S-HNI (Min) | 14 | 1,232 | ₹206,976 |
| S-HNI (Max) | 67 | 5,896 | ₹990,528 |
| B-HNI (Min) | 68 | 5,984 | ₹1,005,312 |
Products and Key Industries
Diffusion Engineers IPO specializes in welding electrodes, flux-coated wires, and wear plates. These products are primarily utilized in the cement, engineering, and steel industries. Most of the company’s revenue comes from the domestic market, while 9.5% of its revenue is derived from exports to international markets.
Financial Status and Balance Sheet
As per the company’s balance sheet, Diffusion Engineers IPO has a total investment of ₹275 crore, with the majority being financed through debt. Investor contributions amount to ₹1 crore, indicating that the company is heavily reliant on debt, which it aims to reduce through the funds raised from the Diffusion Engineers IPO.
Diffusion Engineers Limited Financial Information (Restated Consolidated)
| Period Ended | 31 Mar 2024 | 31 Mar 2023 | 31 Mar 2022 |
|---|---|---|---|
| Assets | ₹275.59 Cr | ₹230.34 Cr | ₹189.55 Cr |
| Revenue | ₹285.56 Cr | ₹258.67 Cr | ₹208.75 Cr |
| Profit After Tax (PAT) | ₹30.8 Cr | ₹22.15 Cr | ₹17.05 Cr |
| Net Worth | ₹190.7 Cr | ₹142 Cr | ₹120.65 Cr |
| Reserves and Surplus | ₹163.03 Cr | ₹138.39 Cr | ₹117.34 Cr |
| Total Borrowing | ₹34.44 Cr | ₹48.09 Cr | ₹24.6 Cr |
Key Performance Indicator
| KPI | Values (as of March 31, 2024) |
|---|---|
| Market Capitalization | ₹628.76 Cr |
| ROE (Return on Equity) | 18.52% |
| ROCE (Return on Capital Employed) | 20.63% |
| Debt/Equity Ratio | 0.18 |
| RoNW (Return on Net Worth) | 18.52% |
| P/BV (Price to Book Value) | 2.47 |
| PAT Margin (%) | 10.79% |
Diffusion Engineers Ltd IPO GMP
The Diffusion Engineers Ltd IPO GMP (Grey Market Premium) serves as an important indicator of the market’s sentiment toward the IPO before its official listing. At present, the Diffusion Engineers Ltd IPO GMP remains stable, which signals moderate investor demand and positive expectations for the stock’s performance when it hits the market.
Conclusion
Diffusion Engineers IPO is aiming to raise funds to support its expansion, build new facilities, and enhance its production capabilities. The company’s diversified product offerings and its extensive customer base across several industries make it an attractive investment opportunity. Coupled with its promising financial growth and steady Diffusion Engineers Ltd IPO GMP, this IPO represents a potential chance for investors to capitalize on the company’s future success.
