Diffusion Engineers IPO is in focus. The issue closes today, September 30 and has received strong demand across all segments. Non-institutional investors led the interest, followed closely by retail investors. The allotment for the issue will be finalised on October 1

The company, which specializes in manufacturing welding consumables, wear plates, wear parts, and heavy engineering machinery for core industries, had already secured Rs 47.14 crore from anchor investors before opening the IPO to the public on September 26.

Here are top 8 things to know ahead of Diffusion Engineers IPO Listings

1. Diffusion Engineers IPO allotment

The allotment of Diffusion Engineers shares is anticipated to occur on Tuesday, October 1, 2024. Following this, the shares will be credited to investors’ demat accounts on Thursday, October 3, 2024.

If you have got allotment Investors can check the allotment status of Diffusion Engineers Limited’s IPO on the BSE website by following these steps: First, visit the BSE website and select ‘Equity’ under the Issue Type. Next, choose Diffusion Engineers Ltd from the drop-down menu. Enter either the Application Number or PAN, click on ‘I am not a Robot,’ and then hit ‘Submit’ to view the allotment status.

2. Diffusion Engineers GMP

The grey market premium (GMP) for Diffusion Engineers initial public offering (IPO) remains robust as the subscription period closes today, September 30, 2024. Unlisted shares of the company are trading at a premium of Rs 58, reflecting a 34.52% surge over the IPO’s upper price band of Rs 168, according to sources tracking grey market activity.

3. Diffusion Engineers IPO details

The Diffusion Engineers IPO was opened on  September 26 and will close on 30, 2024, with a price range of Rs 159 to Rs 168 per share. Shares are expected to debut on the BSE and NSE on Friday, October 4, 2024.

This IPO consists entirely of a fresh issue of 94,05,000 shares, valuing the offering between Rs 149.54 crore and Rs 158 crore. The minimum bid size is 88 shares, priced at Rs 14,784, with 35% of the shares allocated to retail investors.

4. Diffusion Engineers IPO Subscription Status

The initial public offering (IPO) of Diffusion Engineers Ltd was subscribed 45.73 times by the third day of the bidding process, as of 11:24 IST, according to BSE data. The IPO received bids for 30.17 crore shares against the 65.98 lakh shares on offer.

Retail investors oversubscribed their portion by 50.21 times, while non-institutional investors subscribed 95.34 times. The qualified institutional buyers (QIBs) section saw a 51% subscription, and the employee portion was oversubscribed by 52.81 times.

5. Experts on Diffusion Engineers IPO

Commenting on the valuation and outlook Anand Rathi Research Team said that Diffusion Engineers Limited is specialized in manufacturing welding consumables, wear plates and heavy machinery for core industries. It provides repair and reconditioning services for heavy equipment and trades in wear protection powders and welding machines. Over the coming years, the company plans to enhance its service delivery by robust growth and operational efficiency.

The domestic brokerage also added that At the upper price band company is valuing at P/E of 20.4x with a market cap of Rs 6,290 million post issue of equity shares and return on net worth of 18.5%. On the valuation front, we believe that the company is fairly priced. Thus, we recommend a “SUBSCRIBE” rating to the IPO.

Whereas commenting on the same Anshul Jain, Head of Research, Lakshmishree Investment & Securities said that The grey market premium (GMP) for Diffusion Engineers’ IPO remains robust on its final subscription day, indicating strong listing expectations. Trading at a premium of Rs 58, or a 34.52% jump over the IPO’s upper price band of Rs 168, the IPO has attracted significant interest.

“The Diffusion Engineers’ IPO was oversubscribed by 37.01 times, with the highest demand from Non-Institutional Investors, who subscribed 72.15 times. Retail Individual Investors followed with 42.69 times, while Qualified Institutional Buyers showed limited interest with 0.44 times subscription,” Jain also said. Further Jain added that the solid grey market premium suggests Diffusion Engineers is likely to list at around a 34% gain, reflecting strong market confidence in the offering.

6. Diffusion Engineers Book Managers 

Unistone Capital has been appointed as the sole book-running lead manager for the Diffusion Engineers IPO, while Bigshare Services serves as the registrar for the public offering.

7. Diffusion Engineers Financial Performance 

Diffusion Engineers has exhibited consistent financial growth over the past few years, with revenue increasing from Rs 87.84 crore in FY 2013 to Rs 257.13 crore in FY 2024, reflecting a CAGR of 10.26% over the last 11 years. Profit After Tax (PAT) also grew from Rs 7.32 crore to Rs 23.40 crore, marking a CAGR of 11.14% during the same period.

Notably, Diffusion Engineers outperformed many industry peers with a 21% CAGR in operating income between FY 2021 and FY 2024, ranking third in the industry. Furthermore, the company achieved an impressive 38% CAGR in profit after tax and a 33% CAGR in EBITDA during this period, highlighting its strong profitability and efficient cost management.

8. About Diffusion Engineers

Diffusion Engineers has established itself as a prominent provider of engineering solutions in both domestic and international markets for over 40 years. The company offers a diverse range of products and services, including the manufacture of specialized welding consumables, wear plates, and heavy engineering equipment for core industries. 

Additionally, it provides repairs and reconditioning services for heavy machinery and equipment, showcasing its commitment to quality and innovation in the engineering sector.

9. Diffusion Engineers Market Presence

Diffusion Engineers is expanding its international footprint, exporting products to over 25 countries, including Singapore, the United Arab Emirates, the United States, and Germany. The company has established overseas subsidiaries in Singapore, Turkey, and the Philippines, and has joint ventures in the United Kingdom and Malaysia, creating a diversified revenue stream and reducing reliance on the domestic market.

This global expansion is crucial for long-term growth, particularly as developing nations increase their demand for industrial products and infrastructure. In FY 2024, export sales contributed 10.2% to the company’s total revenues, underscoring the significance of international markets in its overall business strategy.