Diffusion Engineers IPO: Files DRHP For Initial Public Offering

Diffusion Engineers, a well-known engineering solutions provider headquartered in Nagpur, has initiated the process of going public. The company recently submitted preliminary documents to the Securities and Exchange Board of India (SEBI) for its upcoming Initial Public Offering (IPO). Founded in 1982, Diffusion Engineers has expertise in providing engineering solutions on a global scale, catering to both domestic and international markets.

Diffusion Engineers IPO Details & Overview

Diffusion Engineers' IPO includes a new offering of up to 98,47,000 equity shares, with a face value of ₹10. According to the draft red herring prospectus (DRHP) submitted on 27 December 2023, the proceeds from the IPO will mainly go towards expanding the current manufacturing facility and setting up a new one in Maharashtra. Furthermore, the raised funds will be utilized for meeting working capital requirements and fulfilling general corporate goals.

Unistone Capital Pvt Ltd acts as the sole book-running lead manager for the IPO, with Bigshare Services Pvt Ltd appointed as the registrar. The company's equity shares are scheduled for listing on both the BSE and the National Stock Exchange (NSE).

Diffusion Engineers play a crucial role in the engineering sector, providing a wide array of products and services. They specialize in welding consumables, manufacturing wear plates, and producing heavy engineering equipment. Diffusion Engineers offers customized repair and reconditioning services for heavy machinery and equipment in response to the growing need for enhanced infrastructure. Diffusion Engineers Limited has peers in the industry, including Ador Welding Limited and AIA Engineering Limited.

Market Insights & Financial Performance

Welding consumables market in India, valued at approximately ₹46 billion in fiscal year 2023, is anticipated to grow to ₹58-60 billion by fiscal year 2026. This growth is attributed to increased investments in infrastructure development, encompassing the construction of roads, bridges, ports, and airports. Similarly, the wear plate market in India, assessed at about ₹20 billion in FY23, is expected to grow with a Compound Annual Growth Rate (CAGR) of 8.5-9.5%, reaching ₹26 billion in FY26.

In the fiscal year ending March 2023, Diffusion Engineers saw a consolidated net profit of ₹22.15 crore, up from ₹17 crore in the prior fiscal year. Consolidated revenue from operations in FY23 increased to ₹254.9 crore, compared to ₹204.6 crore in FY22. For the first quarter of FY24, the company posted a net profit of ₹6.25 crore and revenue of ₹65.8 crore.