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The initial public offering of Diffusion Engineers Ltd. has been subscribed 7.16 times on the first day of bidding on Thursday, led by demand from portion reserved for employees.
The company is looking to raise Rs 158 crore. The offering is a fresh issue, with no offer for sale component.
The price band has been set at Rs 159-168 per share for the issue, which will close on Sept. 30, with the listing expected to take place on Oct. 4. The market value of the company at the upper end of the price band is Rs 629 crore.
Issue Details
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Issue opens: Sept. 26.
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Issue closes: Sept. 30.
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Issue price: Rs 159-168 per share.
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Fresh issue: Rs 158 crore.
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Total issue size: Rs 158 crore.
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Use Of Proceeds
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Funding capital expenditure requirements towards the expansion of existing manufacturing facility.
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Setting up of a new manufacturing facility.
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Funding working capital requirements.
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General corporate purposes.
Business Overview
Incorporated in 1982, Diffusion Engineers is engaged in the business of manufacturing welding consumables, wear plates and wear parts, and heavy engineering machinery for core industries.
The company provides a superconditioning process at its manufacturing facilities, a surface treatment solution for machine components that enhances wear resistance, eliminates stress, and improves repairability, ultimately extending their lifespan and reducing production costs.
The company presently operates from four manufacturing units, out of which Units I, II, and III are located in Nagpur Industrial Area, in Nagpur, Maharashtra, and Unit IV is located in Khapri (Uma) in Nagpur.
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Risk Factors
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The company is increasingly dependent on a domestic market for its sales, and any downturn in it could dent their market share.
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The company had negative cash flows during certain fiscals in relation to their operating, investing, and financing activities.
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The company’s business is working capital intensive. Any insufficient cash flows from their operations or inability to borrow to meet their working capital requirements may materially and adversely affect business and results of operations.
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Diffusion Engineers Subscription Status: Day 1
The IPO was subscribed 7.16 times as of 5:00 p.m. on Thursday.
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Qualified institutional buyers: 3%.
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Non-institutional investors: 6.8 times.
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Retail investors: 11.24 times.
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Portion reserved for employees: 16.67 times.
Diffusion Engineers IPO GMP Today
The grey market premium of Diffusion Engineers was Rs 90 as of 3:25 p.m., implying a 53.57% gain over the IPO price, according to Chittorgarh's unit Investorgain. The estimated listing price based on the GMP is Rs 258 per share.
GMP is not an official price quote for the stock and is based on speculation.
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