Diffusion Engineers, a company that has carved a niche in providing engineering solutions for both domestic and international markets, made a notable debut on the stock exchanges on Friday, October 4, 2024. The overall market sentiment was weak, yet Diffusion Engineers IPO stood strong, listing at ₹193 on the NSE, reflecting a 15.17% premium over its IPO issue price of ₹168. On the BSE, the shares opened at ₹188, indicating an 11.90% premium. This strong performance meant that investors who were allotted shares from the Diffusion Engineers IPO could pocket a profit of up to ₹25 per share, showcasing a return of over 15%.

Established for over four decades, Diffusion Engineers focuses on manufacturing specialized welding consumables, wear plates, and heavy engineering equipment for key industries. The company is also renowned for providing custom repairs and reconditioning services for heavy machinery, further establishing its reputation in the engineering sector.

IPO Details

The Diffusion Engineers IPO was a Book Built Issue amounting to ₹158 Crores, which comprised entirely of a Fresh Issue of 94.05 Lakh Shares. The subscription period ran from September 26, 2024, to September 30, 2024. Allotments were expected to be finalized around October 1, 2024, with shares listing on both the NSE and BSE on October 4, 2024.

The share price band for the IPO was set between ₹159 and ₹168 per share, requiring a minimum lot size of 88 shares. This translates to a minimum investment of ₹14,784 for retail investors, while High-Net-Worth Individuals (HNIs) needed to invest in a minimum of 14 lots (or 1,232 shares), amounting to ₹2,06,976.

Unistone Capital Private Limited acted as the book-running lead manager for the IPO, while Bigshare Services Private Limited served as the registrar.

Grey Market Premium and Subscription Status

Before listing, the Grey Market Premium (GMP) for Diffusion Engineers was indicated at ₹62, based on the company's financial performance. However, it is crucial to note that the GMP is primarily determined by supply and demand in an unregulated market and should not be the sole basis for trading decisions. The GMP is mentioned here for informational purposes only.

As of 5:35 PM on September 30, 2024, the Diffusion Engineers IPO showed a robust subscription rate, being oversubscribed by 114.49 times by the end of its third day of the subscription period, reflecting strong investor interest.

Allotment Process

The Diffusion Engineers IPO allotment date was October 1, 2024. Investors can check their allotment status online by following these 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.

This streamlined process ensures that investors can easily confirm their allotments and proceed with their investment plans.

Objectives of the IPO

The proceeds from the Diffusion Engineers IPO are set to be utilized for several critical objectives:

₹713.80 Million for funding capital expenditure aimed at expanding existing manufacturing facilities.

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

₹220.00 Million to meet the company's working capital needs.

General corporate purposes.

Financial Performance Review

Financially, Diffusion Engineers has demonstrated solid growth. The revenue figures for the fiscal years 2022, 2023, and 2024 were ₹2087.47 Million, ₹2586.72 Million, and ₹2855.61 Million, respectively. The EBITDA for the same years were ₹266.46 Million, ₹316.73 Million, and ₹462.84 Million. The Profit after Tax (PAT) also showed an upward trajectory: ₹170.46 Million in FY22, ₹221.45 Million in FY23, and ₹308.03 Million in FY24.

For this IPO, the company reported a pre-issue EPS of ₹10.94 and a post-issue EPS of ₹8.23. The pre-issue P/E ratio stood at 15.35x, while the post-issue P/E ratio was 20.41x, against an industry average of 33.9x. Additionally, Diffusion Engineers recorded a ROCE of 20.63% and a ROE of 18.52% for FY24. These figures suggest that the IPO is fairly priced and provides investors with a promising opportunity.

Conclusion

Given the financial performance and the valuation metrics, we recommend that investors consider applying for the Diffusion Engineers Limited IPO for potential listing gains and long-term investment prospects. With a solid business model, robust management, and consistent financial growth, Diffusion Engineers is well-positioned for future expansion and success in the engineering solutions sector.

The Finance Saathi IPO List 2024 - Mainline and SME Dashboard provides latest IPO information, latest IPO news, Upcoming IPO News, IPO Details, subscription status, IPO GMP and IPO Review of Upcoming IPO, Active IPO, and Listed IPOs at one place. Check latest IPO Review & analysis, Live IPO GMP today, Live IPO Subscription Status Today, Share Price, Financial Information and other details before applying in the IPO.

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