Diffusion Engineers IPO opens today: GMP up 48%; is it worth your money?

Diffusion Engineers IPO opens today: The initial public offering (IPO) of heavy machinery and equipment maker, Diffusion Engineers, opens for public subscription today. With the IPO, the company is offering a fresh issue of 9,405,000 shares aggregating up to Rs 158 crore. Diffusion Engineers said that it has already raised Rs 47.15 crore from anchor investors on bidding concluded on September 25, 2024.

The public issue is available at a price band of Rs 159-168, and a lot size of 88 shares. Accordingly, investors can bid for a minimum of 88 shares and in multiples thereof. The minimum amount of investment required by retail investors is Rs 14,784 for one lot of 88 shares of Diffusion Engineers IPO.

Bigshare Services is the registrar for the Diffusion Engineers IPO, while Unistone Capital is the book-running lead manager of the issue.

Diffusion Engineers intends to use the net proceeds from the IPO for funding capital expenditure requirements, setting up a new manufacturing facility, as well as for general corporate purposes.

Meanwhile, sources tracking grey market activities reveal that the unlisted shares of Diffusion Engineers were trading at a premium of Rs 80, or 48 per cent against the upper end of the IPO price, reflecting positive market sentiments for the public issue.
 

The public issue will close for subscription on Monday, September 30, 2024. Following the closure of the subscription window, the basis of allotment of Diffusion Engineers IPO is likely to be finalised on Tuesday, October 1, 2024, and subsequently, the company’s shares will be credited into demat accounts on Thursday, October 3, 2024.

Diffusion Engineers shares are expected to make their market debut on the bourses on Friday, October 4, 2024, by listing at BSE and NSE.
 

Diffusion Engineers IPO review
Diffusion Engineers has also garnered favourable reviews from brokerages, including Swastika Investmart and Anand Rathi Research, for the public issue.
 

Should you subscribe to Diffusion Engineers IPO?

Swastika Investmart - Subscribe for listing gains

Analysts at Swastika Investmart remain bullish on the public issue of Diffusion Engineers and recommend that investors consider applying for the IPO, both for potential listing gains and long-term value appreciation. According to them, the IPO’s P/E valuation is considered fair.

Analysts, in a note, highlighted that the company operates in a promising sector with significant infrastructure and industrialization spending. “The company’s focus on forward integration and diversification positions it for future growth. Demonstrated consistent financial growth and improving margins,” said analysts.

Anand Rathi Research - Subscribe

Brokerage firm Anand Rathi Research, in a note, has assigned a Subscribe rating on the Diffusion Engineers IPO. According to the brokerage, at the upper price band, the company is valued at a P/E of 20.4x with a market cap of Rs 629 crore post-issue of equity shares and a return on net worth of 18.5 per cent. “On the valuation front, we believe that the company is fairly priced. Thus, we recommend a Subscribe rating to the IPO,” said Anand Rathi Research.

About Diffusion Engineers

Incorporated 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. The company also provides repair and reconditioning services for heavy equipment and trades in wear protection powders and welding machines.