EE Development Engineers IPO: 10 Key Insights for Investors Next Week

DEE Development Engineers, an engineering firm, is launching its Initial Public Offering (IPO) next week. Here are 10 essential details from their Red Herring Prospectus (RHP) that potential investors should know:

1. IPO Structure

• Issue Size: ₹418 crore.
• Fresh Issue: ₹325 crore.
• Offer-for-Sale (OFS): 4,582,000 equity shares by promoter Krishan Lalit Bansal.
• Investor Allocation: 50% for qualified institutional buyers (QIBs), 35% for retail investors, and 15% for non-institutional investors.
• Bid Lots: Minimum of 73 equity shares and in multiples thereafter.
• Key Promoters: Krishan Lalit Bansal, Ashima Bansal, and DDE Piping Components Private Limited.
• Listed Peer: ISGEC Heavy Engineering Ltd with a P/E ratio of 42.40.

2. Purpose of the IPO

• Working Capital: ₹75 crore.
• Repayment of Borrowings: ₹175 crore.
• General Corporate Purposes: The remainder.

3. Business Overview

• Core Services: Specialised process pipe solutions for sectors like oil and gas, power (including nuclear), and chemicals.
• Products: Includes high-pressure piping systems, piping spools, high-frequency induction pipe bends, and various other piping products and components.
• Manufacturing Growth: India’s manufacturing sector has seen rapid growth, with Gross Value Added (GVA) increasing from ₹1,502 thousand crores in FY 2012 to ₹2,617 thousand crores in FY 2023.

4. Manufacturing Facilities

• Locations: Palwal (Haryana), Anjar (Gujarat), Barmer (Rajasthan), and Bangkok (Thailand).
• Facilities: Include multiple sites in Palwal, Anjar, and Barmer, as well as Numaligarh and Bangkok.

5. Key Risks

• Sector Dependence: Revenue may be impacted by slowdowns in the oil and gas, power, and chemical sectors.
• Debt Repayment: Significant portion of IPO proceeds will go towards repaying existing obligations.

6. Financial Performance

• Growth: Between FY 2022 and FY 2023, the company saw a 30.47% increase in revenue and a 58.25% rise in profit after tax.

7. Subsidiaries

• Indian Subsidiaries: DEE Fabricom India Private Ltd, Malwa Power Private Ltd, and the Atul Krishan Bansal Foundation.
• Overseas Subsidiary: DEE Piping Systems (Thailand) Co Ltd.

Additional Notes:

• Anchor Investors: Their shares will be locked for 90 days from allotment for 50% of their shares, and 30 days for the remaining 50%.
• Listing Date: Shares are expected to be listed on the BSE and NSE on June 26.
• Allocation and Refunds: The basis of allocation will be settled on June 24, with refunds commencing on June 25 and shares credited to demat accounts the same day.

This IPO offers a chance to invest in a company with a solid track record in specialised engineering solutions, poised for further growth.