Diffusion Engineers IPO Debuts with Double-Digit Premium Despite Market Turmoil

IPO Debut for Diffusion Engineers Amid Market Downtrend

Shares of Diffusion Engineers Ltd. made their market debut with an impressive double-digit premium on Friday, October 4, despite ongoing challenges in the broader market. On the National Stock Exchange (NSE), the stock opened at Rs 193.50, marking a 15.18% increase from its initial public offering (IPO) issue price of Rs 168. Meanwhile, the shares commenced trading on the Bombay Stock Exchange (BSE) at Rs 188, a premium of 12%.

Post-listing, the stock quickly gained further momentum, reaching Rs 203.17 on the NSE—hitting the upper circuit limit. As of 10:27 AM, the stock had seen a traded volume of 24.47 lakh shares, highlighting a strong demand from investors. The company now holds a market capitalization of Rs 760 crore.

Grey Market Performance vs. Listing

The initial listing price fell short of expectations set by the grey market, where Diffusion Engineers’ shares were trading at a premium of 34.52%. Nevertheless, the actual listing showcased significant investor interest, reflecting the company’s value even in uncertain market conditions.

IPO Subscription Details: Overwhelming Response

Diffusion Engineers’ Rs 158-crore IPO garnered an overwhelming response from investors, being subscribed a massive 114.5 times during its open window between September 26 and September 30. Non-institutional investors were particularly enthusiastic, oversubscribing their portion by 207.60 times, while qualified institutional buyers (QIBs) and retail investors subscribed 95.74 times and 85.61 times, respectively. Additionally, the company had successfully raised Rs 47.15 crore from anchor investors prior to the IPO.

Use of IPO Proceeds

The funds raised through the IPO will be primarily utilized to meet the company’s working capital needs and for general corporate purposes. This strategic move aims to strengthen the company’s operations and support future growth initiatives.

A Look at Diffusion Engineers: An Established Name in Industrial Solutions

Founded in 1982, Diffusion Engineers Ltd. has carved a niche for itself in the industrial space, focusing on manufacturing welding consumables, wear plates, and heavy machinery for core sectors. In addition to manufacturing, the company provides specialized repair and reconditioning services for heavy equipment, playing a vital role in supporting the operational efficiency of its clients.

Financial Performance: Impressive Growth in FY24

Diffusion Engineers recorded notable financial growth in FY24, with consolidated revenue increasing by 10% year-on-year to Rs 285 crore. This growth was fueled by higher sales of welding consumables, wear plates, and trading activities. The company’s net profit also jumped significantly, rising by 39% year-on-year to Rs 30.8 crore, showcasing solid operational efficiency and increasing profitability

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.