DEE Development Engineers IPO opens for subscription: Check timeline, price band and more

DEE Development Engineers IPO (initial public offering) opened for subscription on Wednesday, June 19. The issue of engineering company, also called DEE Piping Systems, will close on Friday, June 21. The price band has been set at ₹193 to ₹203 per equity share.

As of 11:40 am, the issue has been subscribed 0.56 times, with the non-institutional investors (NIIs) portion being subscribed 0.73 times and retail investors bidding 0.79 times the quota allotted for them. The qualified institutional buyers (QIBs) haven't placed their bids yet.

The ₹418.01 crore IPO is a mix of fresh issue of shares worth ₹325 crore and an offer for sale (OFS) component of shares aggregating up to ₹93 crore.

The IPO lot size is fixed at 73 shares, and an interested investor can bid for a minimum of one lot and in multiples after that.

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The company intends to use the fresh proceeds from the IPO to repay borrowings, fund working capital requirements, and general corporate purposes. The shares of the mainboard issue will be listed on the BSE (formerly Bombay Stock Exchange) and the National Stock Exchange (NSE).

Equirus Capital Private Limited and SBI Capital Markets Limited are the book-running lead managers, while Link Intime India is the registrar for the DEE Development Engineers IPO

DEE Piping Systems IPO: Timeline

• Bidding dates: June 19 to June 21
• Allotment finalisation: June 24
• Refund initiation: June 25
• Transfer of shares to demat account: June 25
• Listing: June 26

About DEE Development Engineers Limited

DDE Development Engineers, which was established in 1988, is an engineering company. It provides specialised process piping solutions such as piping systems, spools, pressure vessels, fittings, modular skids, industrial stacks, and accessories like heaters, coils and other customised components. Its offering includes engineering services, pre-fabrication work, and handling complex metals.

The company has seven manufacturing plants- three in Haryana and one each in Rajasthan, Assam, Gujarat and Bangkok (Thailand).

DFIPL, a wholly owned subsidiary of DD Development Engineers, runs a heavy fabrication facility at Gujarat's Anjar and a dedicated engineering plant in Chennai, Tamil Nadu.

The company's products are sold in domestic and international markets such as the United States, Japan, Europe, Canada, China, the Middle East, Vietnam, Singapore, Nigeria and Taiwan. Some of its clients include Mitsubishi Heavy Industries, MAN Energy Solutions SE, JGC Corporation, Reliance Industries, HPCL–Mittal Energy, and Thermax Babcock & Wilcox Energy Solutions.

DEE Piping Systems IPO: Strengths and challenges

With over three decades of experience, DEE Development Engineers Limited Ltd has its own strengths, making a lucrative investment opportunity. The company, having served in 27 countries, is the biggest player in the process piping solutions industry in India, in terms of installed capacity.

It has a strong focus on automation with automated equipment. The company has an engineering team of 748 personnel working on design, engineering and product development as of March 31, 2024.

However, experts have also flagged a few limitations for DEE Development Engineers Ltd. The firm is heavily dependent on the oil and gas sector. International operations constitute over 40% of the total revenue and global volatility could severely impact its performance.

Further, it faces tough competition from the strong players like ISGEC Heavy Engineering, L&T Heavy Engineering, Seonghwa Industrial Co, SUNG IL (SIM) Co, US Pipe Fabrication and McDermott, among others.

DEE Development Engineers IPO: Key financials

The engineering company has shown impressive growth over the last few years. From ₹495 crore in FY21, DEE Development Engineers' revenue grew to ₹595 crore in FY23 despite a marginal dip to ₹460 crore in FY22. In quarter 3 of FY24, the company posted ₹545 crore revenue.

DEE Development Engineers reported a net profit of ₹14.2 crore in FY21, ₹8.19 crore in FY22 and ₹12.9 crore in FY23.

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