Diffusion Engineers IPO Listing: Shares of Diffusion Engineers made a decent debut on the bourses on Friday, October 4, as they listed at ₹193.50 on NSE, a premium of 15.2 percent over the IPO price of ₹168. Meanwhile, on BSE, the stock listed at ₹188, up 12 percent over the issue price.
The initial public offering (IPO), valued at ₹158 crore, was open for subscription from September 26 to September 30. The IPO was priced in the range of ₹159-168 per share.
Following the three-day bidding process, Diffusion Engineers IPO closed with an overwhelming demand as the issue was subscribed 213.41 times. The IPO received bids for 234.59 crore shares against 1.09 crore shares on offer. The retail investor segment saw a subscription of 96.74 times, while the non-institutional investors (NII) category was booked a massive 430.54 times. Meanwhile, the qualified institutional buyers (QIBs) quota was subscribed 253.04 times.
The Diffusion Engineers IPO was entirely a fresh issue of 94 lakh shares. There was no offer-for-sale component in the IPO. The minimum application size for retail investors was set at 88 shares, requiring an investment of ₹14,784. Investors could bid for a minimum of 88 shares and in multiples thereof. The IPO allotment date was October 1.
“Diffusion Engineers Ltd has garnered considerable attention for its IPO, with a subscription rate surpassing 114 times. The company is poised for a strong stock market debut on October 4, 2024, with an anticipated premium of approximately 33% over the upper price band,” said Akriti Mehrotra, Research Analyst, StoxBox.
Diffusion Engineers IPO reserved 20% of the issue for QIBs, 15% for NIIs, and 35% for retail investors. The issue includes a reservation of up to 50,000 shares for employees offered at a discount of ₹8 to the issue price.
The company plans to use the net proceeds from the issue to fund several objectives, including capital expenditures for expanding its existing manufacturing facility at Khasra No. 36, 38/1, 38/2, 38/3, Khapri (Uma), Nagpur, Maharashtra. Additionally, it aims to establish a new manufacturing facility in Nagpur, Maharashtra. The funds will also support the company's working capital requirements and be allocated for general corporate purposes.
Unistone Capital Pvt Ltd is the book running lead manager of the Diffusion Engineers IPO, while Bigshare Services Pvt Ltd is the registrar for the issue.
Established in 1982, Diffusion Engineers Limited specializes in manufacturing welding consumables, wear plates, parts, and heavy machinery for core industries. The company provides repair and reconditioning services for heavy machinery and also trades in wear protection powders, welding, and cutting machines. It operates four manufacturing units, three of which are located in Nagpur's Hingna Industrial Area, while the fourth, at Khapri (Uma), Nagpur, handles product processing and manufacturing.
Diffusion Engineers ranks among the top three industry players in terms of CAGR for operating income, profitability, and EBITDA between FY21 and FY24, with a notable revenue growth of 16.6% CAGR from FY22 to FY24. Its profit after tax (PAT) increased significantly from ₹17 crore in FY22 to ₹30.80 crore in FY24.
