Diffusion Engineers Limited is poised to launch its Initial Public Offering (IPO) in the coming days, marking an important milestone for the company, which has been providing engineering solutions for over 40 years. The IPO subscription period runs from September 26 to September 30, 2024, with shares offered in the price band of ₹159 to ₹168. The expected allotment date is October 1, 2024, with shares likely to be listed on both the NSE and BSE by October 4, 2024.

Company Overview

Diffusion Engineers is engaged in providing comprehensive engineering solutions for customers in both domestic and international markets. The company specializes in manufacturing a variety of products, including:

Special welding consumables

Wear plates

Heavy engineering equipment

In addition to these products, Diffusion Engineers offers specialized and customized repairs and reconditioning services for heavy machinery and equipment, catering to core industries such as manufacturing, construction, and energy.

IPO Details and Subscription

The Diffusion Engineers IPO is a Book Built Issue with a total offering amounting to ₹158 crores, consisting entirely of Fresh Issue of 94.05 lakh shares. The share price band is set at ₹159 to ₹168, and the minimum lot size for retail investors is 88 shares. Retail investors must invest a minimum of ₹14,784, while High-Net-Worth Individuals (HNIs) are required to invest at least ₹2,06,976 for 14 lots (1,232 shares).

Unistone Capital Private Limited is the book-running lead manager for this IPO, and Bigshare Services Private Limited is acting as the registrar.

Grey Market Premium and Subscription Status

The Grey Market Premium (GMP) for Diffusion Engineers' shares is currently estimated at ₹62, indicating strong investor interest based on the company's financial performance. It’s crucial to note that the GMP is influenced by demand and supply dynamics in an unregulated market, and real trading based on GMP is not recommended.

As of September 30, 2024, the live subscription status indicates that the Diffusion Engineers IPO has been subscribed 114.49 times on its third day of subscription, reflecting robust demand.

How to Check Allotment Status

The allotment date for the Diffusion Engineers IPO is set for October 1, 2024. Investors can check their allotment status by following these steps:

Visit the IPO allotment status page.

Select Diffusion Engineers Limited IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to view your allotment status.

Objectives of Diffusion Engineers IPO

The proceeds from the fresh issue will be allocated for several strategic purposes, including:

₹713.80 million for funding capital expenditure related to the proposed expansion of the existing manufacturing facility.

₹303.85 million for establishing a new manufacturing facility in Hingna, Sonegaon District, Nagpur, Maharashtra.

₹220.00 million for funding working capital requirements.

General corporate purposes.

Financial Performance

Diffusion Engineers has demonstrated a steady growth trajectory in its financials over the last three fiscal years:

Fiscal 2024: Revenue of ₹2,855.61 million, EBITDA of ₹462.84 million, and Profit After Tax of ₹308.03 million.

Fiscal 2023: Revenue of ₹2,586.72 million, EBITDA of ₹316.73 million, and Profit After Tax of ₹221.45 million.

Fiscal 2022: Revenue of ₹2,087.47 million, EBITDA of ₹266.46 million, and Profit After Tax of ₹170.46 million.

Valuation Metrics

For the Diffusion Engineers IPO, the pre-issue EPS stands at ₹10.94, while the post-issue EPS is expected to be ₹8.23. The pre-issue P/E ratio is 15.35x, and the post-issue P/E ratio is 20.41x, compared to an industry P/E of 33.9x. The company’s ROCE for FY24 is reported at 20.63%, and the ROE is 18.52%, indicating strong financial health and suggesting that the IPO is fairly priced.

Investment Recommendation

With a promising GMP indicating potential listing gains of approximately 37%, and given the company’s solid financial performance and growth prospects, we recommend that investors apply for the Diffusion Engineers Limited IPO for both potential listing gains and long-term investment opportunities.

For more information on upcoming investment opportunities, check out Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi.

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In conclusion, the Diffusion Engineers IPO presents a compelling investment opportunity backed by strong demand and positive financial indicators. Investors are encouraged to evaluate their investment strategies and consider participating in this IPO.