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DEE Development Engineers is set to launch its initial public offering (IPO) on Wednesday, June 19, 2024, aiming to raise Rs 418.01 crores. This includes a fresh issue of 1.6 crore shares amounting to Rs 325.00 crores and an offer for sale of 0.46 crore shares aggregating Rs 93.01 crore.
On June 18, the company secured Rs 125.10 crore from anchor investors, offering a total of 61,62,777 shares. Leading anchor investors included HDFC Mutual Fund, Kotak Mahindra Trustee, and LIC MF Large and Mid Cap Fund.
Here are the key details of DEE Development Engineers IPO
DEE Development Engineers IPO key dates
Subscription for the IPO commences today, June 19, 2024, and will conclude on June 21, 2024. The allotment process for the issue is expected to close by Monday, June 24, 2024. Further, the stock is scheduled to be listed on both BSE and NSE, with the tentative listing date set for Wednesday, June 26, 2024.
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DEE Development Engineers IPO price bands, lot size
The IPO price band is set at Rs 193 to Rs 203 per share. The minimum lot size is 73 shares, requiring a minimum investment of Rs 14,819 for retail investors. For sNII (small non-institutional investors), the minimum investment is Rs 2,07,466 (14 lots or 1,022 shares), and for bNII (big non-institutional investors), it is Rs 10,07,692 (68 lots or 4,964 shares).
DEE Development Engineers IPO GMP
As per Chittorgarh IPO, the grey market premium (GMP) for DEE Development Engineers IPO is Rs 80. With a price band of Rs 203, this suggests an estimated listing price of Rs 283 per share, projecting an expected listing gain of 39.41 per cent.
DEE Development Engineers IPO financials
In fiscal year 2022-23 (FY23), DEE Development Engineers reported a 30.47 per cent increase in revenue to Rs 614.32 crore from Rs 470.84 crore in FY22. Its profit after tax (PAT) also rose by 58.25 per cent to Rs 12.97 crore in FY23 compared to Rs 8.20 crore in FY22.
DEE Development Engineers IPO share allotment
The IPO allocates up to 50 per cent of the shares for qualified institutional buyers (QIBs), at least 35 per cent for retail investors, and a minimum of 15 per cent for non-institutional investors (NIIs).
DEE Development Engineers IPO lead book runners
SBI Capital Markets Limited and Equirus Capital Private Limited are the book running lead managers, and Link Intime India Private Ltd is the registrar for the issue.
About DEE Development Engineers:
DEE Development Engineers Limited specialises in providing customised process piping solutions for sectors such as oil and gas, power (including nuclear), chemicals, and other process industries through engineering, procurement, and manufacturing.
Post IPO, the company will have an earnings per share of Rs 2.77 with a price-to-earnings multiple of 73.33 times. So should you apply?
Here’s what key brokerages say:
Anand Rathi:
Anand Rathi:
The company has recently expanded their business by entering a new business vertical of design, engineering, fabrication and manufacturing of pilot plants. Their order book from pilot plants as of December 31, 2023, is Rs 106.08 million whereas the over all order book value stood at Rs 8,287 million, analysts said.
The company's P/E ratio is 73.2 times its FY24 annualised earnings, with a market capitalization of Rs 14,016.9 million after
the issuance of equity shares and a market cap-to-sales ratio of 1.92 times its FY24 annualised earnings.
The company notably benefits from a solid order book and consistent financial performance. Looking at these factors analysts at Anand Rathi advised subscribing the IPO.
Swastika Investmart:
The brokerage firm stated in a note that DEE has a strong competitive position with established clients and boasts a diverse portfolio of specialised offerings. It also benefits from a robust order book and consistent financial performance.
However, some key risks necessitate careful consideration. DEE's business is susceptible to downturns in the industries it serves, such as oil and gas, power, and chemicals, analysts said. Additionally, competition from both domestic and international players presents a challenge. Furthermore, losses incurred by its subsidiaries require monitoring.
“Despite the premium valuation, DEE's market leadership, consistent growth trajectory, and strong order book warrant consideration for long-term investors. Thus, we recommend a 'Subscribe' rating for long term,” analysts at Swastika Investmart recommended.
Reliance Securities:
According to analysts at Reliance Securities DEE’s increasing focus on high margin products with additional contributions from modular skids and usage of high-grade materials, forging technology tie-ups with select global OEMs is set to derive consistent order flow for the company. This will also make DEE a preferred partner for its clients for the next few years, they said. Hence, the brokerage recommended subscribing to the issue.
