Diffusion Engineers is a renowned provider of engineering solutions, serving both domestic and international markets for over four decades. The company specializes in manufacturing special welding consumables, wear plates, and heavy engineering equipment for core industries, in addition to offering customized repairs and reconditioning services for heavy machinery and equipment.

The upcoming Diffusion Engineers IPO is a Book Built Issue amounting to ₹158 Crores, consisting entirely of a Fresh Issue of 94.05 Lakh Shares. The subscription period opens on September 26, 2024, and closes on September 30, 2024. Allotment is expected to be finalized on or around October 1, 2024, with shares anticipated to list on both the NSE and BSE by October 4, 2024.

The share price band for this IPO is set between ₹159 to ₹168 per equity share, with a minimum lot size of 88 shares. Retail investors are required to invest a minimum of ₹14,784, while High-Net-Worth Individuals (HNIs) must invest in 14 lots (1,232 shares), totaling ₹2,06,976.

The book-running lead manager for the issue is Unistone Capital Private Limited, with Bigshare Services Private Limited serving as the registrar.

Grey Market Premium (GMP):

The Grey Market Premium for the Diffusion Engineers IPO is anticipated to be around ₹62, based on the company’s financial performance. It is crucial to note that actual trading based on Grey Market Premium does not occur, making price discovery dependent on the listing of shares on the stock exchange. The GMP reflects demand and supply dynamics in the unregulated market and is mentioned solely for educational purposes.

Live Subscription Status:

As of 04:35 PM on September 27, 2024, the live subscription status indicates that the Diffusion Engineers IPO has been subscribed 23.84 times on its second day. For real-time updates, investors can check the BSE.

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 online using the following steps:

Navigate to 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 to the following objectives:

₹713.80 Million for funding capital expenditure requirements towards proposed expansion of the existing manufacturing facility.

₹303.85 Million for setting up 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 shown consistent growth in its financials over the last three fiscal years:

Fiscal 2024 Revenue: ₹2,855.61 Million

Fiscal 2023 Revenue: ₹2,586.72 Million

Fiscal 2022 Revenue: ₹2,087.47 Million

The EBITDA for these years was:

Fiscal 2024: ₹462.84 Million

Fiscal 2023: ₹316.73 Million

Fiscal 2022: ₹266.46 Million

The Profit After Tax figures stood at:

Fiscal 2024: ₹308.03 Million

Fiscal 2023: ₹221.45 Million

Fiscal 2022: ₹170.46 Million

For the IPO, the company is issuing shares with a pre-issue EPS of ₹10.94 and a post-issue EPS of ₹8.23. The pre-issue P/E ratio is 15.35x, while the post-issue P/E ratio is 20.41x, against an industry P/E of 33.9x. The company’s ROCE for FY24 is 20.63% and ROE is 18.52%, indicating that the IPO is fairly priced.

Expert Recommendation:

With the Grey Market Premium (GMP) suggesting potential listing gains of 37%, and considering the company’s solid financial performance and favorable valuation metrics, experts recommend that investors apply for the Diffusion Engineers Limited IPO for potential listing gains and as a viable long-term investment.

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