Diffusion Engineers IPO Subscribed 114.49 Times On Day 3 With Solid NIIs Demand

The initial public offering of Diffusion Engineers Ltd. has been subscribed 114.49 times on Monday, its third and final day of bidding, led by demand from non-institutional investors. The offer was subscribed 27.19 times on the second day and 7.16 times on the first day of bidding last week.

The company is looking to raise Rs 158 crore. The offering is a fresh issue, with no offer for sale component.

The price band has been set at Rs 159–168 per share for the issue, which will close on Sept. 30, with the listing expected to take place on Oct. 4. The market value of the company at the upper end of the price band is Rs 629 crore.

• Issue opens: Sept. 26.

• Issue closes: Sept. 30.

• Issue price: Rs 159-168 per share.

• Fresh issue: Rs 158 crore.

• Total issue size: Rs 158 crore.

• Funding capital expenditure requirements towards the expansion of existing manufacturing facility.

• Setting up of a new manufacturing facility.

• Funding working capital requirements.

• General corporate purposes.

Incorporated in 1982, Diffusion Engineers manufactures welding consumables, wear plates and wear parts, and heavy engineering machinery for core industries.

The company provides a superconditioning process at its manufacturing facilities, a surface treatment solution for machine components that enhances wear resistance, eliminates stress, and improves repairability, ultimately extending their lifespan and reducing production costs.

The company presently operates from four manufacturing units, out of which units I, II, and III are located in Nagpur Industrial Area, Maharashtra, and Unit IV is located in Khapri (Uma) in Nagpur.

• The company is increasingly dependent on a domestic market for its sales, and any downturn in it could dent their market share.

• The company had negative cash flows during certain fiscals in relation to their operating, investing, and financing activities.

• The company’s business is working capital intensive. Any insufficient cash flows from their operations or inability to borrow to meet their working capital requirements may materially and adversely affect business and results of operations.