Dee Development Engineers IPO Opens For Public Bids; Issue Size Rs 418 Cr
The issue values at a price to earning (PE) of 56.4 times on the upper price band based on FY24 earnings, which is fairly valued, says expert
Dee Development Engineers' initial public offering (IPO) went live for the public subscription on 19 June in an attempt to raise Rs 418 crore.
The IPO consists of fresh issues of Rs 325 crore and an offer-for-sale (OFS) worth Rs 93 crore by promoter and investor selling shareholders with a price band of Rs 193 to Rs 203.
Retail investors can bid for the maximum of 13 lots, while for the 1 lot of 73 shares with the minimum investment of Rs 14,819.
Dee Development Engineers IPO opened on 19 June and will close on 21 June followed by allotment on 24 June. Subsequently, the IPO will list on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) on 26 June.
SBI Capital Markets and Equirus Capital are the book running lead managers, while Link Intime India is the registrar to the offer.
Analyst Note
“Dee Development Engineering has evolved as one of the key players in process piping solutions in India. It is also increasing its focus on high-margin products with additional contributions from modular skids and usage of high-grade materials, forging technology tie-ups with select global OEMs to derive consistent order flow to become a preferred partner for its clients for the next few years,” said Prathamesh Masdekar, Research Analyst, Stoxbox.
The issue is valued at a price to earning (PE) of 56.4 times on the upper price band based on FY24 earnings, which is fairly valued given the strong growth prospectus and stickiness of customers. Therefore, a ‘Subscribe’ rating for the issue is recommended, advised Masdekar.
IPO Objectives
Company intends to utilise the net proceeds of Rs 325 crore towards funding working capital requirement and repayment of debt along with general corporate purposes.
Besides, 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.
Firm’s Financials
The firm registered revenue of Rs 614 crore in FY23, compared to Rs 470 crore in FY22.
The firm’s profit after tax (PAT) increased to Rs 12.97 crore in FY23 compared to Rs 8.20 crore in FY22.
Overall, revenue and PAT increased by 30.47 per cent and 58.25 per cent respectively.
