Shares of Diffusion Engineers had a solid debut on the stock market on Friday, October 4, listing at ₹193.50 on the NSE, which is a 15.2% increase from the IPO price of ₹168. On the BSE, the stock listed at ₹188, showing a 12% rise over the issue price.
The initial public offering (IPO), valued at ₹158 crore, was open for subscription from September 26 to September 30, with shares priced between ₹159 and ₹168 each.
The demand for the Diffusion Engineers IPO was impressive, with the issue oversubscribed by 213.41 times. Investors placed bids for 234.59 crore shares against the 1.09 crore shares available. In the retail segment, the subscription was 96.74 times, while the non-institutional investors (NII) category saw a massive 430.54 times oversubscription. The qualified institutional buyers (QIBs) segment was also in high demand, getting subscribed 253.04 times.
About the Diffusion Engineers IPO
The IPO was entirely a fresh issue of 94 lakh shares, with no offer-for-sale component. The minimum application size for retail investors was set at 88 shares, requiring an investment of ₹14,784. Investors could bid for at least 88 shares and in multiples of that amount. The IPO allotment date was October 1.
“Diffusion Engineers Ltd has generated significant interest for its IPO, with a subscription rate of over 114 times. The company is expected to have a strong debut on October 4, 2024, with an anticipated premium of around 33% over the upper price band,” stated Akriti Mehrotra, Research Analyst at StoxBox.
The IPO reserved 20% for QIBs, 15% for NIIs, and 35% for retail investors. There was also a reservation of up to 50,000 shares for employees, offered at a discount of ₹8 to the issue price.
The company plans to use the proceeds from the IPO to fund various initiatives, including expanding its existing manufacturing facility in Nagpur, Maharashtra, and establishing a new manufacturing facility in the same region. Additionally, the funds will support working capital needs and be allocated for general corporate purposes.
Unistone Capital Pvt Ltd is the lead manager for the Diffusion Engineers IPO, while Bigshare Services Pvt Ltd is the registrar for the issue.
About the Company
Founded in 1982, Diffusion Engineers Limited specializes in manufacturing welding consumables, wear plates, and parts for heavy machinery used in core industries. The company also provides repair services for heavy machinery and trades in welding and cutting machines. It operates four manufacturing units, three of which are located in Nagpur’s Hingna Industrial Area, and one at Khapri (Uma), Nagpur.
Diffusion Engineers is among the top three players in its industry, showing strong growth in operating income, profitability, and EBITDA between FY21 and FY24, with a notable revenue growth rate of 16.6% CAGR from FY22 to FY24. Its profit after tax (PAT) increased significantly from ₹17 crore in FY22 to ₹30.80 crore in FY24.
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