Diffusion Engineers IPO Debuts With 15% Premium Amid Market Volatility
During its three-days subscription window, the issue allures subscription of 114.5 times accounting for the bids worth over Rs 12,692 crore
The initial public offering (IPO) of Diffusion Engineers debuted on the bourses with a premium of 15 per cent. The issue listed at Rs 193.50 per equity share on the National Stock Exchange (NSE) against its issue price of Rs 168 per equity share.
Meanwhile, on Bombay Stock Exchange (BSE), it listed at Rs 188 with 12 per cent premium.
During its three-days subscription window, the issue allured subscription of 114.5 times accounting for the bids worth over Rs 12,692 crore. Retail category was subscribed 85.61 times, while the qualified institutions category received nearly 100 times subscription.
“As India continues to experience rapid industrialization and increasing demand for improved infrastructure, the welding consumables market is estimated at around Rs 51 billion in FY24, with projections of Rs 64 to 66 billion by FY27. Diffusion Engineers ranks among the top three industry players in terms of CAGR for operating income, profitability, and EBITDA between FY21 and FY24. We thus recommend that investors allotted shares consider ‘holding’ their positions from a medium to long-term perspectivem,” said Akriti Mehrotra, Research Analyst, StoxBox.
The Rs 158 crore IPO consisted exclusively of fresh issues with the price band fixed at Rs 159 to 168 per equity share.
Unistion Capital was the book running lead manager, while Bigshare Services was the registrar to the offer.
The net proceeds of Rs 158 crore from the fresh issue will be utilised towards funding capital expenditure requirements for purchase of equipment and general corporate purposes.
Additionally, the funds will also be invested for the expansion of new manufacturing facilities and setting up of new manufacturing facilities.
Moreover, the firm will also get benefits on listing in the public market which will enhance the brand’s visibility and provide liquidity to the shareholders.
Diffusion Engineers registered the revenue of Rs 285.56 crore in FY 23-24 against Rs 258.67 crore in FY 22-23.
While, the profit after tax (PAT) increased to Rs 30.8 crore in FY 24 against Rs 22.15 crore in FY 23.
Overall, the revenue increased by 19 per cent, whereas PAT climbed 39 per cent between FY 23 and FY 24.
Diffusion Engineers operates in the manufacturing of welding consumables, wear plates, wear parts, and heavy engineering machinery for core industries. They also provide specialised and customised repair and reconditioning services for heavy machinery and equipment.
Additionally, the company is involved in trading of anti-wear powders, as well as welding and cutting machinery. They follow a synergistic business model, focusing on forward integration by manufacturing both basic and specialized products, which gives them a competitive edge and broadens its scope in the industry.
