Diffusion Engineers IPO Opens for Subscription With High Market Interest

Bidding for the initial public offering (IPO) of Diffusion Engineers Limited commenced today, and will remain open for subscription until September 30, 2024. The company, engaged in the manufacturing of welding consumables and heavy engineering equipment, has set a price band of ₹159 to ₹168 per share.

The public issue aims to raise ₹158 crore through the offering of 9,405,000 fresh shares. As reported, the IPO has already secured ₹47.15 crore from anchor investors following bidding that concluded on September 25, 2024.

Differing from standard broker assessments, the shares of Diffusion Engineers, a major player in the Indian manufacturing sector, are trading at a premium in the grey market. Observers note the shares are currently trading at a premium of ₹78, demonstrating positive investor sentiment. Such market activity indicates a strong interest in the IPO, with the public issue subscribed 2.38 times by mid-day, the retail segment subscribed 3.95 times, and the non-institutional investors (NII) segment filled at 1.73 times during the first day of bidding.

Regarding logistical details, one lot of the IPO consists of 88 shares, demanding a minimum investment of ₹14,784 for retail investors. The official registrar managing the IPO process is Bigshare Services Private Limited, with Unistone Capital serving as the lead manager.

Diffusion Engineers intends to utilize the proceeds from the IPO for funding capital expenditure, establishing a new manufacturing facility, and general corporate purposes. Market experts anticipate the finalisation of share allotments by October 1, with shares being credited to investors’ demat accounts by October 3. The IPO’s listing date on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) is expected to be October 4, 2024.

Industry analysts have generally issued positive reviews on the Diffusion Engineers IPO. Akriti Mehrotra, a research analyst at StoxBox, recommends subscribing from a medium to long-term perspective, citing the company’s strategic business model and financial growth from FY21 to FY24. Anshul Jain, Head of Research at Lakshmi Shree Investment and Securities, echoed this sentiment, emphasizing the company’s diverse product portfolio and strong financial performance, marked by a 10% increase in revenue in 2024.

Brokerage firms, such as Swastika Investmart and Anand Rathi Research, have endorsed the IPO with ‘subscribe’ ratings, noting the company’s fair valuation and growth prospects in a promising industrial segment. They acknowledge the firm’s strategic focus on forward integration and expansion, positioning it favorably within the sector.