The company has announced a price range of ₹159 to ₹168 per share for its public offering, which amounts to ₹158 crore.
Diffusion Engineers IPO has set the price band between ₹159 to ₹168 per share.
Diffusion Engineers initial public offering (IPO) is set to commence on September 26 and will conclude on September 30. This offering consists entirely of a new equity sale, comprising 94.05 lakh shares.
The company has announced a price range of ₹159 to ₹168 per share for its public offering, which amounts to ₹158 crore. Investors can place bids for a minimum of 88 shares in a single lot, with additional shares available in multiples thereafter.
The issue is being conducted via the book-building process, which allocates 50 per cent of the offer to qualified institutional buyers (QIB) on a proportional basis, 15 per cent to non-institutional investors, and 35 per cent to retail investors.
The company plans to allocate the net proceeds from the IPO to cover capital expenditure needs for the expansion of its current manufacturing facility, the establishment of a new manufacturing site in Hingna, working capital requirements, and various other corporate purposes.
About the company
Diffusion Engineers specializes in delivering engineering solutions to clients in both domestic and international markets. With over four decades of experience, the company has expanded its product and service range to include specialized welding consumables, wear plates, and heavy engineering equipment tailored for critical industries.
Additionally, it offers customized repair and refurbishment services for heavy machinery and engages in the trade of anti-wear powders and welding and cutting equipment.
The company specializes in customized repair and reconditioning services for heavy machinery and equipment. Beyond its primary services, Diffusion Engineers is also involved in the trading of anti-wear powders as well as welding and cutting machinery.
In the financial year 2024, the company’s consolidated revenue from operations grew by 10 per cent compared to the previous year, reaching ₹285 crore. This growth was mainly driven by higher revenue from welding consumables, wear plates, and trading activities. Additionally, net profit for the same period surged by 39% year-on-year, amounting to ₹30.8 crore.
Unistone Capital serves as the exclusive book-running lead manager, while Bigshare Services acts as the registrar for the offering. The equity shares are set to be listed on both the BSE and NSE.
Diffusion Engineers IPO opens on September 26: 5 key factors to know before bidding
Diffusion Engineers business model and key competitors
Founded in 1982, Diffusion Engineers Limited specialises in manufacturing welding consumables, wear plates and heavy machinery for core industries.
The company provides specialised repair and reconditioning services for heavy equipment and trades in wear protection powders and welding machines.
The company operates four manufacturing units in Nagpur, Maharashtra. It is primarily engaged in the production of special-purpose welding electrodes, flux-cored wires, wear plates, abrasion—and corrosion-resistant coatings, and flux-cored wires.
With over four decades of business operations, the company has established long-standing relationships with several clients. It served 503, 500 and 444 customers in FY 2024, 2023 and 2022, respectively. Meanwhile, its top 10 clients contributed 29.4%, 30.9% and 33.2% to overall revenue in the last three fiscal years. Cement, core engineering, and steel are three major industries in terms of revenue contribution.
Among the listed peers, the key competitors of Diffusion Engineers include ISGEC Heavy Engineering Limited, Esab India Limited, Ador Welding Limited, Ewac Alloys Limited and AIA Engineering Limited, among others.
Diffusion Engineers IPO price band, lot size and listing date
Subscriptions for Diffusion Engineers IPO will open on September 26 and close on September 30. The IPO share allotment status is expected to be finalised on October 1.
Refunds for non-allottees and shares credited to the demat accounts of successful bidders will be initiated on October 3. The IPO listing date has been tentatively fixed as October 4. The stock will be listed on the NSE and BSE.
The minimum application size for retail investors is a single lot of 88 shares, amounting to an investment of at least ₹14,784. For small and medium-sized institutional investors (sNII), the minimum investment is 14 lots (1,232 shares), totalling ₹2,06,976, while for big institutional investors (bNII), the minimum bid size is 68 lots (5,984 shares), amounting to ₹10,05,312.
The company has set aside up to 50,000 shares for employees at a discount of ₹8 per share compared to the issue price.
Bigshare Services Private Limited is the registrar for the Diffusion Engineers IPO, while Unistone Capital Private Limited is the bookrunning lead manager for the issue.
Diffusion Engineers IPO: Key Financial
For the financial year ending March 31, 2024, Diffusion Engineers Limited reported consolidated revenue of ₹285.56 crore, compared to ₹258.67 crore on March 31, 2023. The company also reported a net profit of ₹30.8 crore in FY24, compared to ₹22.15 crore in FY23.
Welding Consumables and Electrodes Manufacturers & Suppliers – Diffusion Engineers
Diffusion Engineers Limited Key strength and weakness
Strength
- Diffusion Engineers transitioned from welding consumables to comprehensive welding services and heavy equipment manufacturing.
- The company serves the steel, power and cement sectors.
- The company has a location advantage in its manufacturing units in Nagpur, Maharashtra. It has an enhanced logistics network and nationwide reach.
- The company has long-standing relationships with several Indian and global customers across industries. In the last three fiscal years, it served 503, 500, and 444 customers.
- Diffusion Engineers exports to over 25 countries and operates subsidiaries to diversify customer base and support sustained growth.
Weakness
- The company earns the majority of its revenue from the domestic market. Hence, any downturn or policy changes could adversely impact the business.
- All manufacturing facilities in Nagpur, Maharashtra, are at risk from social unrest, natural disasters, or production disruptions.
- Business revenue is dependent on five major industries, including cement, power, and others. Hence, any industry-specific slowdown could impact the company’s growth prospects.
- Plans for new production facilities involve significant financial investment and operational risks.
- Potential delays or issues in obtaining necessary approvals and licenses for new facilities could affect operations and financial outcomes.
Diffusion Engineers IPO objective
The company plans to use the net proceeds from the issue to fund capital expenditures for expanding its existing manufacturing facility at Khasra, Nagpur, Maharashtra. It will also use a portion of the funds to support the establishment of a new manufacturing facility at Sonegaon in Nagpur.
The proceeds will also address the company’s working capital needs and cover general corporate purposes.