Diffusion Engineers IPO: Price Band ₹159-₹168 - Subscribe Now!

Founded in 1982, Diffusion Engineers Limited is active in the manufacture of welding consumables, wear plates and parts, and heavy machinery for core industries. The company offers specialised repair and reconditioning services for heavy machinery and equipment. Diffusion Engineers Limited has four manufacturing units located in Nagpur, Maharashtra. As of 29th February 2024, the company had a team of over 130 qualified engineers.

The Objectives of the Issue

Diffusion Engineers Limited intends to utilise the Net Proceeds from the Issue towards the following objectives:

1. Funding capital expenditure requirements towards the expansion of existing manufacturing facility at Khapri (Uma), Nagpur, Maharashtra
2. Setting up of a new manufacturing facility located at MIDC, Hingna, Sonegaon District, Nagpur, Maharashtra
3. Funding working capital requirements of the Company
4. General Corporate Purposes

Highlights of Diffusion Engineers IPO

Diffusion Engineers IPO is set to launch with a book-built issue of ₹158.00 crores. The issue is entirely fresh. Here are the key details of the IPO:

• The IPO opens for subscription on 26th September 2024 and closes on 30th September 2024.
• The allotment is expected to be finalised on 1st October 2024.
• Refunds will be initiated on 3rd October 2024.
• Credit of shares to Demat accounts is also expected on 3rd October 2024.
• The company will tentatively list on BSE and NSE on 4th October 2024.
• The price band is set at ₹159 to ₹168 per share.
• The fresh issue comprises 0.94 crore shares, aggregating to ₹158.00 crores.
• The minimum lot size for the application is 88 shares.
• Retail investors need to invest a minimum of ₹14,784.
• The minimum investment for small NII (sNII) is 14 lots (1,232 shares), amounting to ₹206,976.
• The minimum investment for big NII (bNII) is 68 lots (5,984 shares), amounting to ₹1,005,312.
• The issue includes a reservation of up to 50,000 shares for employees offered at a discount of ₹8 to the issue price.
• Unistone Capital Pvt Ltd is the book running lead manager for the IPO.
• Bigshare Services Pvt Ltd serves as the registrar.

Diffusion Engineers IPO Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 30th September 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors are advised to complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Diffusion Engineers IPO Issue Details/Capital History

Diffusion Engineers IPO is scheduled from 26th September to 30th September 2024, with a price band of ₹159 to ₹168 per share and a face value of ₹10. The total issue size is 94,05,000 shares, raising up to ₹158.00 crores through a fresh issue. The IPO will be listed on BSE and NSE. The pre-issue shareholding is 2,80,21,259 shares.

Diffusion Engineers IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:

Investors can place bids for a minimum of 88 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: Diffusion Engineers Ltd

Strengths:

• Long-standing presence in the industry since 1982
• Diversified product portfolio including welding consumables, wear plates, and heavy machinery
• Specialised repair and reconditioning services
• Multiple manufacturing units in strategic locations

Weaknesses:

• Geographical concentration of manufacturing facilities in Nagpur
• Dependence on core industries for business

Opportunities:

• Expansion of manufacturing capabilities
• Growing demand for specialised repair and reconditioning services
• Potential for technological advancements in welding and wear protection

Threats:

• Fluctuations in raw material prices
• Intense competition in the engineering sector
• Economic slowdowns affecting core industries

Financial Highlights: Diffusion Engineers Ltd

Below are the consolidated financial results for the Fiscal years FY24, FY23, and FY22:Below are the consolidated financial results for the Fiscal years FY24, FY23, and FY22:

Diffusion Engineers Limited has shown steady growth in recent years. The company's revenue increased by 10%, and profit after tax (PAT) rose by 39% between the financial year ending on 31st March 2024 and 31st March 2023.

Assets have shown consistent growth, increasing from ₹1,895.46 lakh in FY22 to ₹2,755.85 lakh in FY24, representing a growth of about 45.4% over two years.

Revenue has seen steady growth, rising from ₹2,087.47 lakh in FY22 to ₹2,855.61 lakh in FY24, marking an increase of 36.8% over two years.

The company's profitability has improved significantly. Profit After Tax increased from ₹170.46 lakh in FY22 to ₹308.03 lakh in FY24, representing a substantial growth of 80.7% over two years.

Net Worth has shown strong growth, increasing from ₹1,206.48 lakh in FY22 to ₹1,907.04 lakh in FY24, a growth of about 58.1% over two years.

Total Borrowings have fluctuated, increasing from ₹245.95 lakh in FY22 to ₹480.92 lakh in FY23, but then decreasing to ₹344.35 lakh in FY24. This recent decrease in borrowings, coupled with increasing profitability, suggests improving financial health.

The company's financial performance shows a trend of steady revenue growth and improving profitability. The substantial increase in Net Worth indicates a strengthening financial position. Investors should consider these positive trends along with the company's growth strategy and the evolving engineering sector when evaluating the IPO.