Loading...

Home >> Blog >> Diffusion Engineers IPO: Review, Valuation, Date & GMP

Diffusion Engineers IPO: Review, Valuation, Date & GMP

  


Diffusion Engineers IPO-Complete Overview

Diffusion Engineers IPO a Mainboard IPO is a book-built issue of Rs.158 crore (0.94 crore Shares) by Diffusion Engineers Limited. The company began producing heavy machinery, wear plates and parts, and welding consumables for essential industries in 1982 and so its establishment in the same year.

The company provides specialist heavy machinery and equipment repair and refurbishment services. The business also sells welding and cutting equipment, as well as wear protection powders. The company offers the Super Conditioning process at its production facilities, which is a surface treatment for machine components that enhances reparability, reduces production costs, and eliminates tensions, hence increasing wear resistance.

The company generated the 3rd highest compound annual growth rate (CAGR) of 21% in operating income between fiscal 2021 and 2024, the 2nd highest CAGR of 38% in PAT, and the 3rd highest CAGR of 33% in EBITDA.

Unit IV in Khapri (Uma), Nagpur, Maharashtra is in charge of processing and manufacturing the products. Diffusion Engineers Limited has four manufacturing units: Units I, II, and III are situated in the Nagpur Industrial Area, Hingna, Nagpur, Maharashtra. 

The following is a breakdown of the manufacturing operations among the several units:

Unit I: Using electrodes for specific welding applications

Unit II: Fabrication and machining of flux-cored wires, wear plates, and wear parts

Unit III: Coatings for resistance to corrosion and abrasion

Unit IV: Wear plates, heavy engineering, and flux-cored wires (since the fiscal year 2024).

This new IPO is to be launched on 26 September 2024, and the initial public offering of this upcoming IPO will end on 30 September 2024.

Detailed Video:

 

Diffusion Engineers IPO Overview

The Rs.158 crore Diffusion Engineers IPO comprises an entirely fresh Issue of 0.94 crore Shares out of which 35% is allocated to retail investors, 50% to institutional investors, and 15% to non-institutional investors. 

The Diffusion Engineers IPO date is from 26 September to September 30, 2024. The IPO listing date is on Friday, October 04, 2024, and it will be listed on the BSE and NSE. Diffusion Engineers IPO price is between Rs.159 to Rs.168 for each Share.

If You want to apply for the IPO, Click Here to Open a Demat Account.

 

Diffusion Engineers: Product Portfolio

Wear plates and wear components, trading, heavy engineering equipment, welding consumables, and anti-wear consumables make up the company’s products and service range.

A) Welding and Anti-wear Consumables

i. Special Purpose Electrodes

A special-purpose electrode is a welding electrode designed specifically for maintenance that guarantees improved performance with the least amount of heat input. 

 

 

ii) Flux Cored Wire

One kind of welding consumable utilized in different welding techniques is flux-cored wire. It is a flux-filled tubular wire that can be used with gas metal arc welding as well as shielded metal arc welding procedures. Throughout the welding process, the flux inside the wire serves several purposes.



iii) Cold Repair Compounds 

These products are utilized for floor coatings, electrical insulation coatings, anti-corrosive coatings, structural coatings, and maintenance coatings.

 

B) Wear Plates / Wear Parts 

i) Wear Plates

Also referred to as abrasion-resistant plates, wear plates are used to lessen wear and tear on equipment surfaces brought on by the hard-working conditions that are common in industries. Assets are shielded by these wear plates against abrasion, impact, corrosion, high-temperature wear, and other threats.

ii) Wear Parts 

In order to maximize equipment availability and minimize downtime, they need to provide optimum wear resistance, ease of assembly, and a shorter repair time. These are essential parts of big machinery used in the steel, cement, and power plant industries, among other industries.

iii) Job work: Welding Service

To extend the life, cut life cycle expenses, and meet the need for spare parts in heavy machinery used by well-known key industries like steel, cement, and electricity in their welding service, job work welding service is done.

Company Financial

The Diffusion Engineers Limited’s revenue grew by 10% and PAT increased by 39% between FYs ended 31 March 2024 and 31 March 2023.

(Amount in Crore)

Period

31 Mar 2024

31 Mar 2023

31 Mar 2022

Total Assets 

275.59

230.34

189.55

Total Revenue

285.56

258.67

208.75

PAT

30.8

22.15

17.05

Net Worth

190.7

142

120.65

Total Reserves & Surplus

163.03

138.39

117.34

Total Borrowings

34.44

48.09

24.6

 

Diffusion Engineers: Valuation Metrics

 

Diffusion Engineers: Industry Analysis

 

 

Diffusion Engineers: Peers’ Returns

 

Revenue Bifurcation

Below is the revenue breakdown for various activities.

(Amount in million)

Net Cash Flow In Various Activities

FY 2024
(Consolidated)

FY 2023 (Standalone)

FY 2022 (Standalone)

Net Cash Flow Operating Activities

390.97 

-47.37

110.51

Net Cash Flow Investing Activities

-385.61

-133.73

-152.02

Net Cash Flow Financing Activities

27.47 

195.78 

25.33

 

Product-wise revenue Bifurcation During the Last Three FYs

(Values in millions)

Particular

FY 2024

FY 2023 

FY 2022 

Welding and Antiwear Consumables

780.85

978.70

721.94

Wear Plate/Wear Parts

834.23

756.14

544.17 

Heavy Engineering Equipment

722.73

531.34

550.11

Trading 

233.44

174.55

141.36 

Revenue from Subsidiaries

Welding and Antiwear Consumables

63.80

65.85

50.36

Wear plate/Wear Parts

136.62

8.80

25.56

Trading

9.78 

33.37

12.39

Total

2,781.44

2,548.76

2,045.89

 

Market-wise Revenue From Operations Bifurcation During the Last Three FYs

(Values in millions)

Particular

FY 2024

FY 2023 

FY 2022 

Domestic Market 

2,517.96

2,190.69 

1,884.15

International Market 

263.49

358.07

161.74

Total 

2,781.44

2,548.76

2,045.89 

 

Zone-wise Revenue Bifurcation of Sales During the Last Three FYs

(Values in millions)

Particular

FY 2024

FY 2023 

FY 2022 

West

372.22 

645.81

655.44

South

586.38 

603.5

337.4 

North

407.27 

287.4

315.41

East

380.26 

353.69

252.99

Central

561.63 

256

234.6

Total

2,307.76

2,146.40 

1,795.84

 

Industry-wise revenue Bifurcation During the Last Three FYs

(Values in millions)

Particular

FY 2024

FY 2023 

FY 2022 

Cement 

942.59

747.09 

719.13 

Engineering 

357.93

262.36 

145.50 

Power 

188.02 

325.82

291.76

Steel 

332.12

291.19

213.35

Sugar 

114.97 

104

91.60

Others

635.63

710.24

496.24

Total 

2,571.26 

2,440.70

1,957.58 

 

The Objective of The Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

  • Financing the necessary capital expenditures for the planned expansion of the current manufacturing facilities at Khasra Nos. 36, 38/1, 38/2, and 38/3, Khapri (Uma), Nagpur-441 501, Maharashtra, India.

  • The construction of a new manufacturing facility (Proposed Facility), situated at Plot Nos. 33-B/1/1/ & 33-B/1/1/Part, MIDC, Hingna, Sonegaon District, Nagpur-440 016, Maharashtra.

  • Corporate Purposes.

Peers of Diffusion Engineers Ltd.

Company Name

Face Value (Rs.)

EPS (Rs.)

P/E (x)

Ador Welding Ltd.

10

46.46

29.01

Aia Engineering Ltd.

2

120.4

35.88

 

Note:-

The basic EPS of the peers is for the financial year ending 31 March 2024.

The peers' P/E Ratio is computed based on the closing market price of the Share as of 12 September 2024.

 

Evaluation

Diffusion IPO price is between Rs.159 to Rs.168 for each Share.

Evaluation of P/E Ratio

Considering the period of FY 2024, with an EPS of Rs.10.94 from the last year, the resulting P/E ratio is 15.36x.

Considering the weighted EPS of Rs.9.12 for the last three years, the P/E ratio is 18.42x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 32.45x.

Particulars

P/E Ratio (x)

Highest 

35.88

Lowest 

29.01

Average

32.45


In simple words, the P/E ratio of Diffusion Engineers Ltd. IPO (15.36x), compared with the industry’s average P/E of 32.45x, has an undervaluation (on a P/E Ratio basis only). Hence the price of the Share seems fairly (fully) priced for the investors when considered based on the average P/E ratio of the industry. 

 

IPO's Strengths 

  • Business models that work together and prioritize forward integration

  • Directly and via OEM serving leaders in the industry

  • Reliable financial results

  • Established connections with clients from several industries

  • A solid management team and seasoned promoters

 

IPO’s Weaknesses 

  • The company's sales are becoming more and more reliant on the local market, so any decline there could reduce its market share.

  • During some fiscal years, the company's operating, investing, and financing operations resulted in negative cash flows. Future negative cash flows would have a detrimental impact on the operating performance and financial situation.

  • The company operates out of 4 manufacturing facilities, all of which are located in Nagpur, Maharashtra. Any localized social unrest, natural disaster, service outage, or other natural disaster in and around Nagpur, Maharashtra, as well as any disruption in production at, or shutdown of all of its manufacturing units, could harm its business and financial situation.

  • The success of various other industries affects business. Economic cyclicality combined with a decline in demand in various other industries, either domestically or internationally, could be detrimental to the company. 

 

Diffusion Engineers IPO GMP Today

Diffusion Engineers Ltd IPO GMP today is Rs.50 as of 23 September 2024. With a price of Rs.168, the estimated IPO listing price is Rs.218 at the time of writing this information.


Diffusion Engineers IPO Timetable (Tentative)

The IPO open date is from September 26 to September 30, 2024, with IPO allotment on October 01, 2024, refund initiation on October 03, 2024, and listing on Thursday, October 04, 2024.

Events 

Date

IPO Opening Date

September 26, 2024

IPO Closing Date

September 30, 2024

IPO Allotment Date 

October 01, 2024

Refund Initiation 

October 03, 2024

IPO Listing Date

October 04, 2024

 

Diffusion Engineers IPO Details 

The Diffusion Engineers Ltd IPO size with a face value of Rs.10 is 9,405,000 Shares at a price band of Rs.159 to Rs.168 per Share with a Lot size of 88 Shares and will be listed at BSE and NSE.

IPO Opening & Closing date 

September 26, 2024 to September 30, 2024

Face Value 

Rs.10 per Share

Issue Price

Rs.159 to Rs.168 

Lot Size

88 Shares

Issue Size

9,405,000 Shares (totaling Rs.158 crores).

Offer for Sale 

N.A

Fresh Issue 

9,405,000 Shares (totaling Rs.158 crores).

Listing At

BSE, NSE

Issue Type 

Book Built Issue IPO

Registrar 

Bigshare Services Pvt Ltd.


Diffusion Engineers IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (88 Shares) amounting to Rs.14,784 and 13 Lots (1144 Shares) amounting to Rs.1,92,192 respectively, while for HNI investors, the minimum Lot is 14 (1,232 Shares) amounting to Rs.2,06,976.

Minimum Lot Investment (Retail)

1 Lot

Maximum Lot Investment (Retail) 

13 Lots

S-HNI (Minimum)

14 Lots

S-HNI (Maximum)

67 Lots

B-HNI (Minimum)

68 Lots


Diffusion Engineers IPO Reservation

Institutional Share Portion

50%

Retail Investors Share Portion

35%

Non-Institutional Shares Portion

15%

 

Promoters and Management of Diffusion Engineers Ltd. 

  • Mr. Prashant Garg

  • Dr. Nitin Garg

  • Ms. Chitra Garg

Pre-Issue Promoter Shareholding

93.10%

Post-Issue Promoter Shareholding

-

 

Diffusion Engineers IPO Lead Managers

  • Unistone Capital Pvt Ltd.

Dividend Policy

Dividend

FY 2023-2024

FY 2022-2023

FY 2021-2022

Dividend (Rs. in million)

14.01 

11.21

14.96

Dividend per Equity Share (Rs.)

0.50

4

4

 

Conclusion

The company has been reporting negative cash flows from investing activities over the past fiscal year(s). The company is opting for an IPO to generate the funds needed before it can meet its targets.

We hope this helps inform you on the financial statements of the company.

Because it will provide you with trustworthy information on the company's insights, financials, and historical performance. This blog will be very helpful to you if you're looking for information about the upcoming IPO.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

DISCLAIMER: The content is purely for educational and information purposes only. We do NOT encourage/advise/suggest our active readers to be involved in any kind of buying or selling securities activities. Always consult your eligible financial advisor for investment-related decisions. The author does NOT through this blog intend to involve readers in trading.

  

Click Here to stay updated with the Upcoming IPOs.

 

Want to start Your Journey in stock market trading and investment? Join our Stock Market Class to become a beginner to expert trader! We cover everything from the basics of trading to advanced strategies for picking stocks. Plus, we're offering a special discount for women and students. Don't miss out - enroll now and kickstart your path to success in the stock market!Open a world of Stock Market by Opening a Demat Account with your favorite Broking firm & Get a trading Strategy worth Rs.15,000!

Click here to open a Free Demat Account.

Thank You for reading this blog.Hope you loved the IPO analysis. Please Comment Below with your feedback because Your feedback motivates us to deliver more such content.

Follow MUKUL AGRAWAL for the latest IPO news and reviews. You can connect with us on social media platforms like TwitterFacebook, and Instagram. You can also subscribe to our YouTube Channel for the latest videos of the stock.

 



Frequently Asked Questions

+

October 04, 2024.

+

October 01, 2024.

+

The issue price is Rs.159 to Rs.168.



Liked What You Just Read? Share this Post:




Viewer's Thoughts

Any Question or Suggestion

Post your Thoughts


IPO

Related Blogs

Afcons Infrastructure IPO

IPO | 05-10- 2024

Afcons Infrastructure IPO: Rev...

The Afcons Infrastructure IPO is about to go live. Learn about key objectives, growth, IPO size, date, and GMP to maximi...

Continue Reading
Garuda Construction and Engineering

IPO | 04-10- 2024

Garuda Construction and Engine...

Garuda Construction and EngineeringDiscover key insights into the Garuda Construction and Engineering IPO, including its...

Continue Reading
KRN Heat Exchanger IPO

IPO | 20-09- 2024

KRN Heat Exchanger IPO: Review...

Discover key insights into the KRN Heat Exchanger IPO, including its objectives and benefits. The IPO opens on 25 Sep & ...

Continue Reading
Manba Finance IPO

IPO | 18-09- 2024

Manba Finance IPO: Review, val...

Explore the Manba Finance IPO with key insights on value, dates, and GMP. Make informed investment decisions with this d...

Continue Reading
Northern Arc Capital Ltd IPO

IPO | 14-09- 2024

Northern Arc Capital IPO: Revi...

Explore the Northern Arc Capital IPO with key details on its value, dates, and GMP. Use our easy guide to make informed ...

Continue Reading
Arkade Developers Ltd IPO

IPO | 13-09- 2024

Arkade Developers Ltd IPO: Rev...

Explore the Arkade Developers Ltd IPO with key details on its value, dates, and GMP. Use our easy guide to make informed...

Continue Reading
to Learn Important Strategy worth Rs.15000
Subscribe on
YouTube
Follow us on
Instagram
Follow Us on
Twitter
Like Us on
Facebook