Diffusion Engineers Limited is active in the manufacture of welding consumables, wear plates and parts, and heavy machinery for core industries. Diffusion Engineers IPO aims to raise Rs 158.00 crores. The issue is entirely a fresh issue of 0.94 crore shares.
IPO opens
September 26, 2024
IPO Closes
September 30, 2024
IPO Size (Rs.)
₹158.00 Cr
Breakup
Fresh issue only
Face Value:
₹ 10
IPO Price in Rs :
₹159 to ₹168 per share
Minimum Lot
88 Shares
Listing At
NSE , BSE (mainboard)
QIB
~50 %
NII Quota
~15%
Retail Quota
~35%
BRLM
Unistone Capital Pvt Ltd
Registrar
Bigshare
About Diffusion Engineers Limited:
Established 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.
Their manufacturing operations are all located in Nagpur :
Unit I makes special purpose welding electrodes;
Unit II makes flux cored wires, wear plates, Wear parts through fabrication and machining
Unit III for coatings for abrasion and corrosion resistance;
Unit IV for flux cored wires (since 2024), wear plates and heavy engineering machinery.
They also have overseas presence through their Subsidiaries in Singapore, Turkey and Philippines, and Joint Ventures/ Associates in United Kingdom and Malaysia.
The company offers specialized repair and reconditioning services for heavy machinery and equipment.
Financials : Diffusion Engineers IPO
As at Mar’ 31,
Particulars / Rs. Cr
2024
2023
2022
Revenue from Operations
278.14
254.88
204.59
Revenue Growth (%)
9.13%
24.58%
–
EBITDA as stated
47.39
34.8
27.52
EBITDA Margin (%)
17.04%
13.65%
13.45%
Net Profit
30.8
22.15
17.05
Net Profit (%)
10.79%
8.56%
8.17%
Net Worth as stated
190.7
142
120.65
Total Borrowings
34.44
48.09
24.6
ROE (%)
18.52%
16.86%
15.10%
ROCE (%)
20.63%
18.46%
17.30%
NAV (₹)
68.06
50.67
43.06
Debt to Equity
0.18
0.34
0.2
Post issue Share Capital
50.23
FV
10.0
IPO price
168.0
EPS Fy24
6.1
PE
27.4
Market cap in Lacs
844
Market cap / Sales
3.03
Anchor: Diffusion Engineers IPO
Salient Points: Diffusion Engineers IPO
The Indian market for welding consumables is expected to grow from ₹51 billion in FY24 to around ₹64-66 billion by FY27, while the wear plates market is projected to expand at a CAGR of 8-9% during the same period.
Net proceeds from the fresh issue,
Rs 71.38 crore will be used for funding capital expenditure requirements towards expansion of its existing manufacturing facility Unit IV at Khapri (Uma) in Nagpur
Rs 30.385 crore towards setting up of a new manufacturing facility located at Hingna in Sonegaon District of Maharashtra; Rs 22 crore towards funding working capital requirements of the company
balance for general corporate purposes.
Revenue Breakup
30.4% from welding and anti-wear consumables
34.9% from wear plate/wear parts
26% from heavy engineering equipment
8.7% from trading.
Almost equally spread across three major segments.
Has served 503 customers for Fiscals 2024.
Company/ FY24 figures
CMP Rs.
Revenue Rs. Cr
Net Profit Rs. Cr
NPM (%)
PE
Macp/sales
RONW %
Diffusion Engineers
168
278
30.8
11.1%
27.4
3.03
18.52
Ador Welding
1,387
884
63.19
7.1%
28.1
2.04
18.43
AIA Engineering
4,290
4854
1137
23.4%
36
8.73
18.41
Forward integration to manufacture special purpose electrodes and flux cored wires.
It invests in R&D activities to create a differentiating factor and sustainability in its welding consumables products vis-à-vis its competitors and to meet company’s clients’ specific requirements.
Exports presently stand at 10%. Company intends to increase it to 20% in 2 years time.
Amongst the players considered for the industry between fiscal 2021-2024, they recorded third highest CAGR of 21% in operating income, second highest CAGR of 38% in profit after tax and third highest CAGR of 33% in EBITDA. ( CRISIL Report)
I intend to apply in Diffusion Engineers IPO. Over the years, they have expanded their capabilities and are further forward integrating. Capex will more than double current capacity, likely to come on stream by end of FY25. They are catering to core industrial sector and are moving up the value chain.
GMP as reported on social media has been Rs. 58 (34%)
This post is exploratory and educational purposes only.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.
