The Diffusion Engineers Ltd IPO has created quite a buzz among investors! Allotment status is set for today, October 1, 2024. This IPO was oversubscribed by an impressive 114.49 times. Specifically, QIBs booked 95.74 times, NIIs booked 207.60 times, and retail investors booked 85.61 times. Let’s learn more details of Diffusion Engineers Ltd IPO
Description
Dive into the details of the Diffusion Engineers Ltd IPO, listing on October 4, 2024.
Key Facts
- The Diffusion Engineers Ltd saw a whopping IPO subscription rate of 207.60 times for non-institutional investors.
- Investors applied for 75,548,360 shares against 6,598,500 shares offered.
- With a price band of ₹159 to ₹168 per share, the total issue size is about ₹158 crores.
- Shares will be listed on BSE and NSE on October 4, 2024.
- HDFC Mutual Fund invested INR 18.14 crore, acquiring 10.8 lakh shares.
- The minimum investment for a lot of 88 Diffusion Engineers Ltd shares is ₹14,784.
- The company has a low debt-to-equity ratio of 0.27, indicating strong financial stability.
- The grey market premium is around INR 55, suggesting positive investor sentiment.
Deep-dive into Diffusion Engineers Ltd IPO
Unlocking Opportunity
- The Diffusion Engineers IPO presents a valuable opportunity for investors. The company plans to use funds raised from this IPO to achieve essential goals:
- It will repay its debt. This step will significantly improve Diffusion Engineers Ltd’s financial stability and lower interest costs.
- Diffusion Engineers will use part of the funds for working capital. It allows them to manage day-to-day expenses effectively.
- They aim to enhance brand visibility and market presence, helping attract more customers.
Numbers on the Rise
- Looking at financial performance, company shows strong growth. For instance, analysts predict a revenue increase of 10% between FY2023 and FY2024. Furthermore, profit after-tax growth is expected to increase by 39% in the same period. Over longer term, between FY2021 and FY2024, the compound annual growth rate (CAGR) of operating income is 21%, while profit after tax will grow by 38%.
Investors’ Ratings
- Companies like BP Equities, Canara Bank Securities, and Ventura Securities recommend applying for Brokerage ratings and have given IPO positive reviews. They believe company is undervalued, with a price-to-earnings (P/E) ratio of 15.36, lower than the industry average of 32.86. This makes it an attractive choice for investors.
Navigating Industry Challenges
- The grey market indicates the estimated listing price might be ₹226, which is a 34.52% increase from IPO price of ₹168. However, some concerns remain. Analysts warn about high competition in welding industry, which could affect profit margins and affect Debt-to-equity ratio. Capital market ratings vary among analysts, suggesting a “May Apply” rating, reflecting cautious optimism due to valuation issues.
IPO Subscription Soars!
- The IPO has generated intense interest, with overall subscriptions reaching 114.50 times. In detail, retail category was subscribed 85.61 times, and Non-Institutional Investors (NIIs) subscribed 207.60 times.
Diffusion Engineers Ltd IPO Final Verdict
To summarize critical recommendations, BP Equities, Canara Bank Securities, and Ventura Securities all suggest applying. Capital Market rates it at 46 points, indicating moderate potential. Overall, while prospects seem bright, investors should stay informed and cautious as they consider this IPO.
