Diffusion Engineers Limited has been providing engineering solutions to 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. Additionally, it offers customized repairs and reconditioning services for heavy machinery and equipment.

The company is launching a Book Built Issue IPO valued at ₹158 Crores, consisting entirely of a fresh issue of 94.05 lakh shares. The subscription period for the Diffusion Engineers IPO opened on September 26, 2024, and will close on September 30, 2024. The allotment results are expected to be finalized on October 1, 2024, with shares listed on the NSE and BSE on or around October 4, 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 a minimum of ₹2,06,976 for 14 lots (1,232 shares). Unistone Capital Private Limited is the book-running lead manager, and Bigshare Services Private Limited serves as the registrar.

Diffusion Engineers Limited IPO GMP Today

The Grey Market Premium (GMP) for the Diffusion Engineers IPO is currently projected at ₹62, indicating positive sentiment based on the company's financial performance. However, it's important to note that the GMP is not a reliable indicator of actual market performance as it reflects unregulated trading dynamics.

Subscription Status:

As of 5:35 PM on September 30, 2024, the live subscription status for the Diffusion Engineers Limited IPO shows an impressive subscription rate of 114.49 times on its third day of the subscription period. Investors can monitor the current subscription status through the BSE.

Allotment Process:

The Diffusion Engineers IPO allotment date is set for October 1, 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, and submit to view the allotment status.

Utilization of IPO Proceeds:

The proceeds from the IPO will be allocated as follows:

₹713.80 Million for capital expenditure towards expanding the existing manufacturing facility.

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

₹220.00 Million for funding working capital requirements.

General corporate purposes.

Financial Overview:

Diffusion Engineers has demonstrated steady financial growth, with revenues for Fiscal Years 2024, 2023, and 2022 reported at ₹2,855.61 Million, ₹2,586.72 Million, and ₹2,087.47 Million, respectively. The EBITDA figures for these years were ₹462.84 Million, ₹316.73 Million, and ₹266.46 Million, while the Profit After Tax for the same years was ₹308.03 Million, ₹221.45 Million, and ₹170.46 Million.

For the Diffusion Engineers IPO, the pre-issue Earnings Per Share (EPS) is ₹10.94, and the post-issue EPS is ₹8.23. The pre-issue Price to Earnings (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 Return on Capital Employed (ROCE) for FY24 stands at 20.63%, and the Return on Equity (ROE) is 18.52%, suggesting that the IPO is fairly priced.

Investment Recommendation:

With a Grey Market Premium (GMP) indicating potential listing gains of 37%, and given the company's strong financial performance and favorable valuation metrics, we recommend investors to apply to the Diffusion Engineers Limited IPO for both potential listing gains and long-term investment opportunities.

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