The IPO of DEE Development Engineers has seen strong interest from investors. On the second day of bidding, the IPO was oversubscribed by over 3 times. It received bids for 5.67 crore shares against the 1.49 crore shares on offer.
Breakdown of Subscription
- Non-Institutional Investors (NII): 8.06 times
- Retail Investors: 4.04 times
- Qualified Institutional Buyers (QIBs): 3%
- Employees: 9.78 times
First Day Summary
On the first day, the IPO had a subscription rate of 2.51 times.
IPO Details
- Price Band: ₹193 to ₹203 per share
- Bidding Period: Closes on Friday, 21st June
- Minimum Investment: 73 shares
Allocation
- QIBs: 50%
- NIIs: 15%
- Retail Investors: 35%
- Employee Discount: ₹19 per share for those bidding in the employee reserve section.
Company Background
DEE Development Engineers is an engineering company that specialises in providing process piping solutions for sectors like oil and gas, electricity (including nuclear), and chemicals. They design, procure, and produce these systems.
- Production Sites: Seven locations (Haryana, Gujarat, Rajasthan, Assam, and Thailand)
- Clients: JGC Corporation, Nooter Eriksen, MAN Energy Solutions SE, Mitsubishi Heavy Industries, Reliance Industries, HPCL-Mittal Energy Ltd, and Toshiba JSW Power Systems.
Analyst Reviews
Marwadi Financial Services
- Valuation: Based on FY-23 / FY24-annualised EPS of ₹1.88/2.77, the business will list at a P/E of 108.06x/73.33x with a market cap of ₹14,017 million.
- Comparison: Peer ISGEC Heavy Engineering Ltd trades at a P/E of 37.8x.
- Recommendation: “Subscribe” due to DEE’s leading position in India’s process piping solutions market, high entry barriers, and state-of-the-art facilities.
Reliance Securities
- Strengths: DEE is one of India’s leading companies in process piping solutions by capacity. It emphasises automation and process excellence.
- Advantages: Strong management team and a focus on high-margin products. The company is also enhancing its partnerships with global OEMs.
- Recommendation: “Subscribe” due to the company’s strategic focus on high-margin products and anticipated consistent order flow.
IPO Specifics
- Value: ₹418 crore (₹325 crore as fresh issue and ₹93 crore as offer-for-sale)
- Promoters: Krishan Lalit Bansal, Ashima Bansal, and DDE Piping Components Private Limited.
- Use of Funds: ₹75 crore for working capital, ₹175 crore for loan repayment, and the rest for general corporate purposes.
GMP Analysis
- Current GMP: +95
- Expected Listing Price: ₹298 per share (46.8% higher than the top IPO price of ₹203).
Based on grey market trends over the last ten sessions, the IPO is expected to list at a solid premium. A higher GMP suggests investors are willing to pay more than the IPO price.
DEE Development Engineers’ IPO is performing well, with strong oversubscription and a positive grey market premium. Investors should consider the company’s robust market position and analyst endorsements when deciding to invest.
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