Diffusion Engineers Limited, a company specializing in providing engineering solutions for over four decades, has launched its Initial Public Offering (IPO), aiming to raise ₹158 Crores through the issuance of 94.05 Lakh Fresh Shares. The subscription period began on September 26, 2024, and will close on September 30, 2024. Investors can expect the allotment results to be finalized around October 01, 2024, with shares listed on both the NSE and BSE on or around October 04, 2024.

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

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

Current Market Insights

As of September 27, 2024, the Grey Market Premium (GMP) for Diffusion Engineers Limited IPO stands at ₹62, suggesting strong demand and potential listing gains. However, it's essential to note that trading based on GMP does not reflect real market conditions.

The live subscription status reveals robust interest, with the IPO being subscribed 23.84 times on its second day, indicating positive investor sentiment.

Objectives of the IPO

The proceeds from the Diffusion Engineers IPO will be allocated towards:

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

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

₹220.00 Million for enhancing the company's working capital.

General corporate purposes.

Financial Performance Overview

Under the leadership of Chairman and Managing Director Prashant Garg, who has two decades of experience, Diffusion Engineers has demonstrated solid financial growth:

Revenue: ₹2855.61 Million in FY 2024, up from ₹2586.72 Million in FY 2023.

EBITDA: ₹462.84 Million in FY 2024, showing a marked increase from ₹316.73 Million in FY 2023.

Profit After Tax: ₹308.03 Million in FY 2024, up from ₹221.45 Million in FY 2023.

The pre-issue Earnings Per Share (EPS) stands at ₹10.94, while the post-issue EPS is projected at ₹8.23. The pre-issue Price-to-Earnings (P/E) ratio is 15.35x, compared to the industry average of 33.9x, indicating a fairly priced offering. The Return on Capital Employed (ROCE) for FY24 is 20.63%, and Return on Equity (ROE) is 18.52%, further affirming the company's strong performance metrics.

Investment Recommendation

Given the positive financial indicators, strong market interest, and fair pricing relative to industry peers, we recommend investors apply for the Diffusion Engineers Limited IPO for potential listing gains and long-term investment benefits. For updates on the latest IPO news and investment insights, visit Top News Headlines and join the conversation on our Finance Saathi Telegram Channel.

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