Diffusion Engineers Files IPO Proposal for Expansion and Growth

2 Jan 2024 , 09:47 AM

On January 1, Nagpur-based Diffusion Engineers took a significant stride toward raising capital by filing a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO).

The IPO exclusively involves a fresh issue of 98.47 lakh equity shares by Diffusion Engineers, a leading provider of engineering solutions. The primary utilization of the net proceeds from the IPO is earmarked for expanding the existing manufacturing facility located in Nagpur’s Khasra, with an allocated investment of Rs 66.6 crore. Additionally, a new manufacturing facility in Nagpur’s Sonegaon is in the pipeline, with an estimated cost of Rs 30.38 crore.

The balance of the funds raised will be allocated towards working capital requirements, projected at approximately Rs 22 crore, and general corporate purposes. The IPO signals Diffusion Engineers’ strategic move to bolster its production capabilities and enhance operational efficiency.

Unistone Capital has been appointed as the merchant banker overseeing the issue, ensuring a seamless process for the IPO.

Diffusion Engineers specializes in manufacturing special welding consumables, wear plates, and heavy engineering equipment catering to core industries. The company demonstrated robust financial performance, recording a consolidated net profit of Rs 22.15 crore in the fiscal year ending March 2023—a substantial increase compared to Rs 17 crore in the preceding fiscal year.

The consolidated revenue from operations for FY23 surged to Rs 254.9 crore, reflecting a notable growth from Rs 204.6 crore in FY22. In the initial quarter of FY24, Diffusion Engineers sustained its positive trajectory with a net profit of Rs 6.25 crore and revenues reaching Rs 65.8 crore.