Diffusion Engineers Limited has been a prominent player in the engineering solutions sector for over four decades, catering to both domestic and international markets. The company specializes in a wide array of products and services, including the manufacture of special welding consumables, wear plates, and heavy engineering equipment. Additionally, it provides customized repairs and reconditioning services for heavy machinery and equipment.

The 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 is from September 26, 2024, to September 30, 2024. Allotment is expected to be finalized around October 01, 2024, with shares tentatively scheduled to be listed on both the NSE and BSE by October 04, 2024.

The share price band for the Diffusion Engineers IPO is set between ₹159 and ₹168 per equity share, with a minimum lot size of 88 shares. Retail investors must invest a minimum of ₹14,784, while High-Net-Worth Individuals (HNIs) need to invest at least ₹2,06,976 for 1,232 shares.

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

Live Subscription Status

As of 05:35 PM on September 30, 2024, the live subscription status for the Diffusion Engineers IPO shows significant demand, with the IPO subscribed 114.49 times on its third day.

Allotment Date and Procedure

The allotment date for the Diffusion Engineers IPO is scheduled for October 01, 2024. Investors can check their allotment status 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 check your allotment status.

Objectives of the IPO

The proceeds from the Fresh Issue will be utilized for the following purposes:

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

₹303.85 Million for setting up a new manufacturing facility at Hingna, Sonegaon District, Nagpur, Maharashtra.

₹220.00 Million for funding working capital requirements of the company.

General corporate purposes.

Financial Performance Overview

Diffusion Engineers has shown robust financial performance, with revenue figures for Fiscal 2024, Fiscal 2023, and Fiscal 2022 recorded at ₹2855.61 Million, ₹2586.72 Million, and ₹2087.47 Million, respectively. The EBITDA for these years was ₹462.84 Million, ₹316.73 Million, and ₹266.46 Million, indicating a solid upward trend. The Profit After Tax for these years was ₹308.03 Million, ₹221.45 Million, and ₹170.46 Million, reflecting consistent growth.

For the Diffusion Engineers IPO, the company is offering shares with a pre-issue EPS of ₹10.94 and a post-issue EPS of ₹8.23. The pre-issue P/E ratio stands at 15.35x, while the post-issue P/E ratio is 20.41x, against an industry P/E of 33.9x. The company's Return on Capital Employed (ROCE) for FY24 is 20.63%, and the Return on Equity (ROE) is 18.52%, suggesting that the IPO is fairly priced.

Investment Recommendation

The Grey Market Premium (GMP) for Diffusion Engineers indicates potential listing gains of 37%, which reflects strong investor interest. Given the company's impressive financial performance and valuation metrics, we recommend that investors apply to the Diffusion Engineers Limited IPO for potential listing gains or long-term investment purposes.

In conclusion, the Diffusion Engineers IPO represents a promising investment opportunity for those looking to enter the market. 

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