Diffusion Engineers Limited

About Diffusion Engineers Limited

Incorporated in 1982, Diffusion Engineers manufactures welding consumables like special-purpose electrodes, flux-cored wires, wear plates/parts, and heavy engineering machinery for various industries. The company also offers specialised welding services to its clients in the cement, power, and steel industries. 

The company has four manufacturing units in Nagpur, Maharashtra, each producing a different set of products. Manufacturing units are strategically located in the central part of India, offering easy access to industries across the country and streamlined logistics for procurement and timely delivery to clients. 

With over four decades of business operations, the company has established long-standing relationships with several clients. It served 503, 500 and 444 customers in FY 2024, 2023 and 2022, respectively. Meanwhile, its top 10 clients contributed 29.4%, 30.9% and 33.2% to overall revenue in the last three fiscal years. Cement, core engineering, and steel are three major industries in terms of revenue contribution. 

Diffusion Engineers also exports its products to international markets to countries like Singapore, Uganda, Kenya, Nepal, Malaysia, Philippines, United Arab Emirates, and others. However, domestic markets contribute to the majority of the revenue. In FY24, around 90.53% of the total revenue came from domestic clients and the rest from the international market. 

Between FY22 and FY24, Diffusion Engineers saw a 10.8% CAGR growth in its revenue from operations, while its net profit grew at a CAGR of 21.9%. Moreover, India’s welding consumables market is estimated to grow at a CAGR of nearly 9% between FY24 and FY27. 

Rising demand for improved infrastructure in India could be one of the key growth drivers for the welding consumables sector. Welding is indispensable in the construction industry, providing strong and reliable joining solutions for structural components. This could indirectly benefit the Diffusion Engineers business and growth prospects. 

Now, Diffusion Engineers is launching its initial public offer (IPO). The total IPO issue size is ₹158 crore, which consists of a fresh issue of over 94 lakh shares. The money raised from the public issue will be used to fund the expansion of its existing manufacturing facility, the setting up of a new manufacturing facility at Nagpur, working capital requirements, and general corporate purposes. 

Here are key details about the Diffusion Engineers IPO:

Financial snapshot

Here’s a quick look at Diffusion Engineers Limited IPO’s strengths, weakness, opportunities and risks (SWOT analysis)

Strengths and opportunities

1. The company has over four decades of experience in the industry and has grown from a single-product to a multi-product manufacturing company. 
2. It has demonstrated consistent growth in revenues and profitability. Revenue rose by over 10% CAGR between FY22 and FY24, while net profit grew at a 21.9% CAGR.
3. The company has a diversified client base, including customers from Original equipment manufacturers (OEMs) as well as direct customers. 
4. The company has long-standing relationships with several Indian and global customers across industries. In the last three fiscal years, it served 503, 500, and 444 customers.  
5. In a strategic move to diversify and enhance the product portfolio of welding consumables, the company intends to manufacture nickel, cobalt, and iron-based powders to cater to the growing demand from various industries.

Risks and threats

1. The company earns the majority of its revenue from the domestic market. Hence, any downturn or policy changes could adversely impact the business.
2. Has experienced negative cash flows from operating and investing activities in the last three financial years.
3. All the manufacturing units are located in Nagpur. Hence, any local issues, such as social unrest or natural disasters, could impact the company's day-to-day business. 
4. The business's revenue is dependent on five major industries, including cement, power, and others. Hence, any industry-specific slowdown, demand change, or cyclicality could impact the company’s growth prospects. 
5. The inability to collect receivables and clients' default in payment could reduce profits and affect cash flows.

Diffusion Engineers Limited IPO details

| Diffusion Engineers Limited IPO date

According to the offer document filed by the company with the SEBI, the Diffusion Engineers IPO’s opening date – in other words, the Diffusion Engineers IPO launch date – will be 26th September 2024. Diffusion Engineers IPO closing date is 30th September 2024. After this, investors will be updated about the allotment status on 1st October 2024.

Investors who have been allotted shares can expect them to be credited to their demat account on 3rd October 2024. The Diffusion Engineers IPO listing date is 4th October 2024. The listing date is the date on which a company's shares are listed on the bourses—NSE and BSE. 

| Diffusion Engineers Limited IPO Price Band

The IPO is a fresh issue. Diffusion Engineers IPO price band has been set between ₹159 and ₹168 per share. Interested investors can choose a price within this band to apply for the IPO. 

Diffusion Engineers IPO listing price will be determined on 4th October 2024. The listing price is the price at which a company’s shares debut on the stock exchanges.

| Diffusion Engineers Limited IPO Lot size

Diffusion Engineers IPO details have been declared. Diffusion Engineers IPO lot size is set at 88 shares, and an investor can apply for a minimum of 1 lot. Meanwhile, the Diffusion Engineers IPO issue size is approx ₹158 crore. 

How to pre-apply for the Diffusion Engineers Limited IPO?

You can pre-apply for the Diffusion Engineers Limited IPO on Upstox. The pre-application for this IPO, which means pre-apply open date, usually begins a day before the IPO opens for subscription. 

Follow these steps to pre-apply for the IPO: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Diffusion Engineers Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Pre-Apply’
7. Accept the mandate on your UPI app

How to apply for the Diffusion Engineers Limited IPO?

If you are interested in this investment opportunity but unsure how to apply for the Diffusion Engineers Limited IPO, here we are listing out the steps for you. 

When the public issue opens for subscription, one can follow this step-by-step guide on how to apply for the Diffusion Engineers Limited IPO on Upstox: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Diffusion Engineers Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

How to check the Diffusion Engineers Limited IPO allotment status?

When the allotment process is completed, you can check the status of your application on the Upstox app. Share allotment is generally done around five to six days after an IPO closes. 

Here’s a step-by-step guide on how to check the Diffusion Engineers Limited IPO allotment status:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover page, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, you will find the ‘View all’ option
5. Once you click on ‘View all’, you will be directed to the ‘IPO’ tab
6. In the ‘IPO’ tab, click on ‘My applications’ 
7. In ‘My applications’, under the History section, your Diffusion Engineers Limited IPO allotment status will be mentioned

Check Allotment Status

Open a demat account with Upstox to apply for the Diffusion Engineers Limited IPO

To apply for the Diffusion Engineers Limited IPO, you need to mandatorily have a demat account. A demat account helps you hold the shares you buy in a dematerialised format. If you don’t have a demat account yet, you can open one with Upstox by visiting our website or by downloading the app.

Here is a step-by-step guide on how to open a demat account with Upstox:

1. Click here to visit the demat account opening page on the Upstox website. 
2. Enter your phone number and other essential details to begin opening a demat account.
3. Upload the scanned copies of your PAN, Aadhaar card, a cancelled cheque, and your bank statement as needed. 
4. Complete the e-verification using the OTP sent to your registered mobile number. 

This is all it takes to open a demat account with Upstox. Easy and quick, right? 

Open Demat Account

Upstox – trading app to apply for the Diffusion Engineers Limited IPO

Applying for IPOs with Upstox is extremely easy. The user-friendly interface and top-notch security make Upstox one of the leading trading apps in India.

You can apply for the Diffusion Engineers Limited IPO on Upstox, provided you have a demat account. As mentioned in the previous section, you can simply follow the steps to open a demat account with Upstox. The biggest advantage is that when you apply for an IPO using your Upstox account, the brokerage charges are zero.

In fact, courtesy of its robust features and minimal charges, Upstox is among the most preferred trading apps. Lakhs of Indians trust Upstox as it is a reliable trading platform that makes IPO applications easy.