Unlisted shares of Diffusion Engineers Ltd are trading Rs 80 higher in the grey market, signalling a 47.62 per cent listing gain from the public issue.
Diffusion Engineers IPO: The initial public offering of Diffusion Engineers Ltd has been opened for public subscription on September 26. The price band of the Rs 158-crore IPO has been fixed at Rs 159 to Rs 168 per share for the public issue. Till 01:09 pm on the first day of bidding on Thursday, the IPO received a 3.74 times subscription garnering bids for 2,46,64,552 shares as against the 65,98,500 shares on offer.
The category for non-institutional investors received 2.88 times subscription, while the portion for retail individual investors (RIIs) got subscribed 6.15 times.
Diffusion Engineers Limited, founded in 1982, is active in the manufacture of welding consumables, wear plates and parts, and heavy machinery for core industries.
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Diffusion Engineers IPO: Key Dates
The IPO will remain opened for public subscription between September 26 and September 30. The share allotment of the Diffusion Engineers IPO will likely be finalised on October 1, while its shares will be listed on both BSE and NSE on October 4.
Diffusion Engineers IPO: Price Band
The price band of the Rs 158-crore IPO has been fixed at Rs 159 to Rs 168 per share for the public issue.
Diffusion Engineers IPO: GMP Today
According to market observers, unlisted shares of Diffusion Engineers Ltd are trading Rs 80 higher in the grey market than its issue price. The Rs 80 grey market premium or GMP means the grey market is expecting a 47.62 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
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Diffusion Engineers IPO: Analysts’ Recommendations
Master Capital Service Ltd in its IPO note said India’s heavy engineering capital goods industry is estimated to be Rs 3,100-3,200 billion as of fiscal 2024 and is projected to clock a CAGR of 7.5-8.5 per cent over fiscals 2023- 27 to reach Rs 3,800-3,900 billion. Diffusion Engineers plans to take advantage of this growth-fueled environment by focusing on a strategic expansion into nickel, cobalt, and iron-based powder manufacturing for an enhanced welding consumables portfolio.
“The company also intends to expand its geographical reach and increase its exports through its subsidiaries and joint ventures. Further, the company is focusing on diversifying its Anti Wear Solutions and Heavy Engineering Equipment business into new industries and providing customized solutions for the same across various industries. Investors looking to invest can invest in the IPO for the medium to long term,” Master Capital Service stated.
SIMFS in its IPO note the welding consumables market in India, estimated at Rs 51 billion in FY24, is projected to reach Rs 64-66 billion by FY27, driven by rising infrastructure investments. The wear plates market is also expected to grow from Rs 22 billion in FY24 to approximately Rs 28 billion in FY27, supported by rapid industrialisation. DEL’s strategic expansion into manufacturing nickel, cobalt, and iron-based powders will enhance its portfolio, reduce import dependence, and align with the “Make in India” initiative, boosting profitability through in-house production. Geographic expansion, notably in Turkey with the incorporation of Diffusion Eurasia Mühendislik Sanayi Ve Ticaret Anonim Şirketi, and exports to 26 countries, further solidifies DEL’s global footprint.
“We recommend to subscribe to the issue as a good long term investment as the company is expected to clock steady growth rates aided by capex and expanding international footprint coupled with reasonable valuations and backward integration and product diversification aiding margin improvements,” SIMFS stated.
Diffusion Engineers IPO: More Details
Diffusion Engineers IPO is a book built issue of Rs 158 crore. The issue is entirely a fresh issue of 0.94 crore shares.
Diffusion Engineers IPO opens for subscription on September 26, 2024 and closes on September 30, 2024. The allotment for the Diffusion Engineers IPO is expected to be finalized on Tuesday, October 1, 2024. Diffusion Engineers IPO will list on BSE, NSE with tentative listing date fixed as Friday, October 4, 2024.
Diffusion Engineers IPO price band is set at ₹159 to ₹168 per share. The minimum lot size for an application is 88 Shares. The minimum amount of investment required by retail investors is ₹14,784. The minimum lot size investment for sNII is 14 lots (1,232 shares), amounting to ₹206,976, and for bNII, it 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 Rs 8 to the issue price.
Unistone Capital Pvt Ltd is the book running lead manager of the Diffusion Engineers IPO, while Bigshare Services Pvt Ltd is the registrar for the issue.
