Diffusion Engineers
Book Building issueMainboardNSE₹158 Cr issue
+11.90%
Listing gain over issue price
Issue size
₹158 Cr
1 lot at cut-off
₹14,784
Lot size
88shares
Open
26 Sep 2024
Close
30 Sep 2024
Allotment
01 Oct 2024
Listing
04 Oct 2024
Listing performance
Issue price
₹168
Listed at
₹188
Listing-day close
₹203.17
Latest price
₹394.35
Close on 23 Oct 2026
Listing gain
+11.90%
Return since issue
+134.73%
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 26 Sep 2024 – 30 Sep 2024
- Listing date
- 04 Oct 2024
- Face value
- ₹10 per share
- Issue price
- ₹168 per share
- Lot size
- 88 shares
- Issue type
- Book Building issue
- Listing at
- NSE
- Total issue size
- ₹158 Cr
- Market cap at offer price
- ₹629 Cr
- Promoter holding
- 93.10% → 69.70% pre-issue → post-issue
- ISIN
- INE184O01015
- Registrar
- Bigshare Services Pvt.Ltd.
- Lead managers
- Unistone Capital Pvt.Ltd.
- Registered office
- T-5 & T-6, Nagpur Industrial Area, MIDC, Hingna, Maharashtra
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 28,06,500 | — | — |
Application size
Minimum 88 shares per lot, in multiples, at ₹168
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 88 | ₹14,784 |
| Retail (max) | 13 | 1,144 | ₹1,92,192 |
| S-HNI (min) | 14 | 1,232 | ₹2,06,976 |
| S-HNI (max) | 67 | 5,896 | ₹9,90,528 |
| B-HNI (min) | 68 | 5,984 | ₹10,05,312 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Shares allocated
28,06,500
Anchor portion
₹47.15 Cr
at ₹168 per share
Valuation and performance
Valuation at offer price
₹168 per share
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 10.99 | 8.23 |
| P/E (×) | 15.29 | 20.41 |
| Price to book (×) | 2.47 | — |
| Market cap | — | ₹629 Cr |
Key performance indicators
Latest reported period
- Return on net worth
- 18.52%
- ROCE
- 20.63%
- Debt / equity
- 0.18
- PAT margin
- 10.79%
- NAV per share
- ₹68.06
- Price to book
- 2.47
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Diffusion Engineers
Diffusion Engineers Limited, incorporated in 1982 and converted to a public company in 1995, is engaged in manufacturing welding consumables, wear plates, wear parts, and heavy engineering machinery for core industries. The company provides specialized repair and reconditioning services for heavy machinery and equipment, and trades in anti-wear powders and welding/cutting machinery. The company operates four manufacturing facilities in Nagpur, Maharashtra, with Unit I manufacturing coated welding electrodes, Unit II producing flux cored wires and wear plates, Unit III manufacturing anti-wear consumables, and Unit IV producing wear plates, flux cored wires, and heavy engineering products. Revenue from operations grew from ₹2,045.89 million in Fiscal 2022 to ₹2,781.44 million in Fiscal 2024.
Company Analysis
from RHPDiffusion Engineers Limited manufactures welding consumables, wear plates, and heavy engineering equipment for cement, power, steel, engineering, and sugar industries, while providing repair and reconditioning services.
Diffusion Engineers Limited, incorporated in 1982 and converted to a public company in 1995, is engaged in manufacturing welding consumables, wear plates, wear parts, and heavy engineering machinery for core industries. The company provides specialized repair and reconditioning services for heavy machinery and equipment, and trades in anti-wear powders and welding/cutting machinery. The company operates four manufacturing facilities in Nagpur, Maharashtra, with Unit I manufacturing coated welding electrodes, Unit II producing flux cored wires and wear plates, Unit III manufacturing anti-wear consumables, and Unit IV producing wear plates, flux cored wires, and heavy engineering products. Revenue from operations grew from ₹2,045.89 million in Fiscal 2022 to ₹2,781.44 million in Fiscal 2024.
Welding consumablesWear plates and wear partsHeavy engineering equipmentIndustrial repair and reconditioning services
Objects of the Issue
- Funding capital expenditure requirements towards Proposed Expansion of our existing manufacturing facility at Unit IV ₹713.80 million p.35
- Setting up of a new manufacturing facility at Hingna, Sonegaon District, Nagpur, Maharashtra ₹303.85 million p.35
- Funding working capital requirements of the Company ₹220.00 million p.35
- General Corporate Purposes p.35
- Funding capital expenditure towards expansion of existing manufacturing facility (Unit IV) at Khapri (Uma), Nagpur, Maharashtra ₹301.41 million (100% of total estimated costs of machinery and equipment) p.61
- Setting up of a new manufacturing facility at Hingna, Sonegaon District, Nagpur p.61
- Funding capital expenditure requirements towards expansion of existing manufacturing facility at Khapri (Uma), Nagpur, Maharashtra ₹713.80 million p.164
- Setting up of a new manufacturing facility at Hingna, Sonegaon District, Nagpur, Maharashtra ₹303.85 million p.164
- Funding working capital requirements of the Company ₹220.00 million p.164
- General Corporate Purposes p.164
- Capital expenditure for proposed expansion including setup of new facility at Unit IV for manufacturing special purpose electrodes and flux cored wire, and expansion of existing facility at Khapri (Uma), Nagpur p.263
Issue Structure
- Total Issue
- Up to ₹[●] million
- Fresh Issue
- Up to 9,405,000 Equity Shares of face value ₹10/- each aggregating up to ₹[●] million
- Offer for Sale
- Not applicable
- Price Band
- ₹[●] per Equity Share (Floor Price) to ₹[●] per Equity Share (Cap Price)
- Lot Size
- [●] Equity Shares and in multiples of [●] Equity Shares thereafter
- Face Value
- ₹10/- each
Business Model
The company generates revenue through the sale of manufactured welding consumables, wear plates, and heavy engineering equipment to customers in cement, power, steel, engineering, and sugar industries. It also provides specialized repair and reconditioning services for industrial machinery and trades in welding and cutting machinery. Domestic sales represented 89.75% of revenue in Fiscal 2024, with export sales comprising 10.25%.
Business Segments
Manufacture and sale of coated welding electrodes, flux cored wires, and related consumables
Manufacturing and sale of wear plates and wear parts used in power plants, steel mills, quarrying, and cement industries
Manufacturing heavy engineering equipment and machinery for core industries, including fabrication and machining services
Provision of specialized repair and reconditioning services for heavy machinery and equipment
Manufactured at Unit I with production capacity of 700 MTA. Special Purpose Electrodes revenue grew from ₹371.82 million in Fiscal 2022 to ₹529.53 million in Fiscal 2023.
Unit II has production capacity of 2,220 MTA and Unit IV has capacity of 9,000 MTA for manufacturing flux cored wires, wear plates, wear parts, fabrication and machining services.
Specialized anti-wear products including coatings for abrasion and corrosion resistances manufactured in Unit III with capacity of 810 MTA. These are specialized items developed in-house, specifically designed to address unique wear and tear issues in industrial equipment.
The company manufactures heavy engineering equipment. Production capacity has increased resulting in decrease in utilization from 103.30% in Fiscal 2022 to 78.89% in Fiscal 2023.
The company undertakes welding services on a job work basis for customers who outsource such work. Job work income represented 6.25%, 6.67% and 7.69% of revenue from operations for Fiscals 2024, 2023 and 2022 respectively.
The company leases heavy equipment on a lease basis business model. As part of the leasing process, the company undertakes the obligation to undertake maintenance and repairs of the equipment leased.
Manufactures special purpose electrodes and flux cored wires for welding applications
Manufactures wear plates and wear parts for industries requiring heavy equipment and wear and tear resistant solutions
Provides fabrication services and manufactures heavy engineering equipment for cement, steel, power, and other industries
Manufactures special purpose electrodes, flux cored wires, and cold repair compounds for welding and maintenance applications
Manufactures abrasion-resistant wear plates and ready-to-fit wear parts using wear plates, forgings and castings for industrial equipment protection
Manufactures and fabricates heavy industrial equipment including air separators, high pressure grinding rollers, FD fans, mill bodies, and RAPH rotters for cement, steel, power and other industries
Trading of thermal spray powders (nickel, cobalt, iron-based alloys) and welding equipment contract manufactured to company specifications
Manufacturing and trading of welding electrodes, flux-cored wires, powders, fluxes, pastes, welding rods, and welding equipment including transformers, generators, and converters
Manufacturing, dealing, and marketing of coated wear-resistant parts for original equipment in power, cement, chemical, fertilizer, paper, mining, transport, atomic power and engineering industries. Provision of super conditioning services for machinery repair and surface treatment
Manufacturing and exporting of equipment and spares for waste disposal by incineration and other methods for hospitals, nursing homes, pharmaceutical manufacturers, municipal corporations, and hotels
Import, export, distribution, and trading of engineering finished and intermediary products
Welding Electrodes, Flux Cord Wires, SOP, Diffcor, Wear Plates, etc.
TIG, MIG, Filler Wires, Thermal Spray Powders, Welding Equipments, etc.
Service Welding & Reconditioning Jobs
SWOT Analysis
Strengths
- • Strong revenue growth trajectory with CAGR of 9.52% in revenue and 14.08% in profitability over last three fiscals(p.58)
- • Diversified geographic presence across multiple regions including domestic and international markets(p.42)
- • Long-term relationships with major customers providing revenue stability(p.54)
- • Established market position with third highest CAGR among peer companies(p.34)
- • Strong revenue and profit growth trajectory with PAT CAGR of 14.08% over three years(p.59)
- • Diversified product portfolio across welding consumables, wear plates, and heavy engineering equipment(p.72)
- • Established brand recognition with 60 registered trademarks in India(p.68)
- • Growing geographic presence across multiple regions with Central and North zones showing expansion(p.60)
- • Synergistic business models with forward integration through captive consumption of produced materials(p.185)
- • Strong financial performance with consistent revenue growth over 11 years(p.185)
- • Diversified customer base across multiple industry sectors(p.185)
- • Experienced promoter with nearly two decades of industry experience(p.185)
- • High proportion of direct customers providing revenue stability(p.185)
- • Synergistic forward-integrated business model across welding consumables, wear plates, and heavy engineering(p.249)
- • Demonstrated consistent financial growth with strong profitability metrics(p.236)
- • Established 40+ year track record with diversified, long-standing customer relationships(p.251)
- • Strategic location in central India enabling efficient logistics and pan-India reach(p.252)
- • Experienced promoter leadership with nearly two decades of industry experience(p.251)
- • Strong in-house R&D capability with DSIR approval and multiple quality certifications(p.237)
- • Captive consumption of manufactured inputs provides cost control and supply chain efficiency(p.250)
- • Strong balance sheet with low debt and high interest coverage(p.240)
- • Extensive trademark portfolio protecting key brands(p.271)
- • Long-term secure leasehold on key manufacturing facilities(p.273)
- • Significant owned manufacturing asset reducing rental dependency(p.274)
- • Established international presence through subsidiaries and joint ventures(p.288)
- • Established manufacturing presence with specialized welding consumables and wear plates production across four units(p.376)
- • Forward-integrated production model reducing dependency on third-party suppliers and enhancing competitive advantage(p.376)
- • Strong track record of growth with third-highest CAGR for operating income and high CAGR for profitability among peer companies(p.376)
- • Qualified and experienced engineering team with over four decades of operational history(p.376)
- • Accredited R&D facility with recognized quality management systems and certifications(p.377)
- • Extensive trademark portfolio providing brand recognition and IP protection(p.419)
- • Strong financial position with consistent profitability across three years(p.423)
- • Meets all SEBI eligibility criteria for IPO with robust net tangible assets(p.422)
- • Multiple manufacturing facilities with valid regulatory approvals(p.418)
Weaknesses
- • Geographic concentration of all four manufacturing facilities in Nagpur, Maharashtra creating single location vulnerability(p.44)
- • High dependence on domestic market for majority of revenues with limited export contribution(p.42)
- • Concentrated customer base with top 5 customers representing 20.81% of revenues(p.53)
- • High working capital intensity with net working capital requirements of ₹927.85 million(p.55)
- • Historical corporate governance and compliance issues including improper allotments and missing records(p.48)
- • Heavy reliance on a few raw material suppliers with top 10 suppliers contributing 31.25% of revenues(p.56)
- • Geographic revenue concentration in western and southern zones despite recent diversification(p.59)
- • Capacity utilization challenges with declining rates in several product lines(p.60)
- • Multiple past regulatory compliance failures regarding pollution control permissions across manufacturing units(p.62)
- • Production capacity exceeded authorized limits from environmental regulators (MPCB)(p.62)
- • No board directors with prior experience of being director in any other listed company in India(p.63)
- • Promoter personal guarantee exposure on company debt facilities(p.63)
- • Outstanding litigation and regulatory proceedings involving company and promoters(p.69)
- • Inability to locate certain historical corporate records creating compliance risks(p.48)
- • Historical non-compliance with Companies Act in sweat equity allotment(p.160)
- • Physical shareholding creating dematerialization delays(p.65)
- • Concentration of ownership among limited number of promoters(p.159)
- • Heavy reliance on newly commissioned manufacturing capacity(p.167)
- • High concentration of top customers—top 10 customers represent 29.43% of revenue(p.266)
- • Significant underutilization of Unit III anti-wear consumables capacity at only 2.12%(p.263)
- • Dependence on distributors for portion of domestic sales limiting direct customer control(p.265)
- • Substantial exposure to imported raw materials creating foreign exchange vulnerability(p.265)
- • Heavy reliance on third-party logistics providers without long-term contracts(p.266)
- • High inventory concentration and working capital dependency(p.271)
- • Extended payment cycles straining cash flow(p.271)
- • Overseas subsidiary underperformance(p.292)
- • Concentration of ownership and management control(p.302)
- • Significant reliance on top ten suppliers for raw materials with limited long-term contracts(p.380)
- • Reliance on few key customers for significant revenue share(p.401)
- • Concentration of domestic revenue in western and southern zones creating geographical risk(p.382)
- • Outstanding regulatory and administrative proceedings involving founders(p.407)
- • Multiple pending industrial labour disputes with significant wage-related claims(p.408)
- • Trade receivables comprise nearly one-quarter of revenue with disputed receivables and doubtful debts(p.382)
- • Historical compliance issues with RoC filings requiring remediation(p.421)
- • Recent application for logo trademark registration still pending approval(p.419)
- • Some unit-level regulatory approvals not yet finalized(p.419)
Opportunities
- • Significant growth potential in Indian welding consumables market projected to reach ₹64-66 billion by fiscal 2027(p.34)
- • Wear plates market expected to grow at CAGR of 8-9% to reach ~₹28 billion by fiscal 2027(p.34)
- • Heavy engineering capital goods industry projected to grow at CAGR of 7.5-8.5% to reach ₹3,800-3,900 billion by fiscal 2027(p.34)
- • Capacity expansion through Proposed Facility and Proposed Expansion to increase installed capacity(p.46)
- • Opportunity to leverage industrial growth across key end-use segments (cement, engineering, power, steel, sugar)(p.34)
- • Growth strategy targeting product portfolio expansion and deeper market penetration(p.59)
- • Expansion of manufacturing capacity through new Proposed Facility and Proposed Expansion(p.61)
- • Central and Northern regions showing strong growth momentum for geographic expansion(p.60)
- • Expansion of heavy engineering capacity to address space constraints for larger projects(p.166)
- • Growth in cement, steel, and power sectors creating demand for heavy engineering(p.166)
- • Backward integration through flux cored wire slitting line for cost optimization(p.173)
- • Expansion into mining and defense sectors with specialized equipment demand(p.167)
- • New facility for special purpose electrodes production at optimum capacity levels(p.173)
- • Expansion into powder manufacturing for welding consumables with higher margins(p.253)
- • Indian welding consumables market projected to grow 8-9% CAGR through FY27(p.206)
- • Indian wear plates market expected to grow 8-9% CAGR to Rs 28 billion by FY27(p.236)
- • Heavy engineering capital goods industry projected to grow 7.5-8.5% CAGR through FY27(p.236)
- • Expansion into mining and defense sectors with specialized wear and maintenance solutions(p.255)
- • Government initiatives supporting infrastructure and manufacturing growth(p.208)
- • Proposed capacity expansion expected to be operational from November 2025(p.264)
- • Export markets showing growth potential with operations in 24+ countries(p.238)
- • Expansion of owned manufacturing facilities(p.274)
- • Growth in wear-resistant plates business segment(p.282)
- • International market expansion through joint ventures(p.285)
- • Recent turnover milestone achievement indicating strong trajectory(p.281)
- • Growing Indian welding consumables market projected to expand from ₹51 billion to ₹64-66 billion by fiscal 2027(p.376)
- • Wear plates market expected to grow at 8-9% CAGR from ₹22 billion to ₹28 billion by fiscal 2027(p.376)
- • Heavy engineering capital goods industry projected to grow at 7.5%-8.5% CAGR from ₹3,100-3,200 billion to ₹3,800-3,900 billion(p.376)
- • Strategic expansion plans for powders in corrosion and abrasion resistance welding applications(p.377)
- • Rapid infrastructure development and industrialization creating increased demand for wear protection equipment(p.376)
- • Expansion into proposed new facilities to increase production capacity(p.429)
- • Geographic market access through dual listing on BSE and NSE(p.428)
- • Access to capital markets for funding growth initiatives(p.445)
Threats
- • High volatility in raw material prices and availability affecting profitability and margins(p.47)
- • Economic cyclicality in dependent industries (cement, power, steel, engineering, sugar) affecting demand(p.44)
- • Dependence on external raw material suppliers with risk of supply disruptions(p.58)
- • Reliance on leasehold manufacturing facilities subject to renewal risks and termination conditions(p.54)
- • Foreign exchange fluctuation risks due to overseas raw material imports(p.56)
- • Risk of downturn in domestic market affecting overall business performance(p.42)
- • Intense competition from organized and unorganized sector players with low entry barriers(p.75)
- • Dependence on imported raw materials with risk of import restrictions(p.72)
- • Product quality defects and customer returns impacting revenue and reputation(p.73)
- • Significant exposure to foreign exchange fluctuation risks on export revenues(p.81)
- • High dependence on third-party transportation providers with no formal contracts(p.77)
- • Significant power supply dependency for manufacturing operations(p.65)
- • Industry sensitivity to general economic downturns and regional conditions(p.75)
- • Dependence on contract labor with risks of wage inflation and availability(p.77)
- • Uncertain machinery costs and potential price increases in capital expenditure(p.166)
- • Potential delays and cost overruns in project implementation(p.166)
- • Cyclicality and volatility in cement, steel and power industry demand(p.166)
- • External factors beyond management control affecting fund deployment(p.165)
- • Government approval delays for manufacturing facilities(p.172)
- • Highly competitive and fragmented welding consumables and wear plates market(p.267)
- • Established competitors with greater access to financial and technical resources(p.267)
- • Exposure to raw material price volatility and foreign exchange fluctuations(p.265)
- • Dependence on cyclical core industries—cement, steel, power—vulnerable to downturns(p.239)
- • Delays or cost overruns in proposed facility expansion could impact growth plans(p.264)
- • Under-utilization of manufacturing capacity could impact financial performance(p.264)
- • Monsoon and agricultural fluctuations impact cement demand from rural housing(p.225)
- • Supply chain disruption from raw material sourcing volatility(p.271)
- • Intellectual property infringement risk(p.271)
- • Regulatory complexity in manufacturing and emissions(p.276)
- • Multiple labour law compliance requirements and pending codification(p.278)
- • Vulnerability to raw material price volatility from commodity markets and currency fluctuations(p.380)
- • Exposure to foreign exchange rate risk across multiple currencies in exports and imports(p.380)
- • Cyclical dependence on cement, steel, power and engineering industries for significant portion of revenues(p.381)
- • Float interest rate exposure on variable rate bank borrowings creating interest rate risk(p.399)
- • Regulatory changes in securities laws could impact IPO process and market operations(p.440)
- • IPO market conditions and subscription risk could affect capital raising success(p.442)
- • Forex exposure risk from foreign exchange transactions and settlements(p.460)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Prashant Garg | Promoter | 37.04% | — |
| Dr. Nitin Garg | Promoter | 24.54% | — |
| Chitra Garg | Promoter | 21.88% | — |
| Prashant Garg | Promoter | — | — |
| Dr. Nitin Garg | Promoter Group | — | — |
| Chitra Garg | Promoter Group | — | — |
| Prashant Garg | Promoter | 10,379,551 shares (37.04%) | — |
| Dr. Nitin Garg | Promoter | 6,876,254 shares (24.54%) | — |
| Chitra Garg | Promoter | 6,130,971 shares (21.88%) | — |
| N. K. Garg HUF | Promoter Group | 2,085,279 shares (7.44%) | — |
| Prashant Garg | Promoter and Managing Director | — | — |
| Prashant Garg | Promoter | 37.04% | — |
| Dr. Nitin Garg | Promoter | 26.42% | — |
| Chitra Garg | Promoter | 21.88% | — |
| Prashant Garg | Promoter | 37.04% | — |
| Dr Nitin Garg | Promoter | 24.54% | — |
| Mrs Chitra Garg | Promoter | 21.88% | — |
| NK Garg (HUF) | Promoter Group | 7.44% | — |
Leadership
Prashant Garg · Chairman and Managing Director
Abhishek Mehta · Chief Financial Officer
Chanchal Jaiswal · Company Secretary and Compliance Officer
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.
Diffusion Engineers IPO FAQs
What is the lot size of Diffusion Engineers IPO?
The minimum lot size of Diffusion Engineers IPO is 88 shares. One lot costs ₹14,784 at the cut-off price.
When does Diffusion Engineers IPO open and close?
Diffusion Engineers IPO opened for subscription on 26 Sep 2024 and closed on 30 Sep 2024.
What is the listing date of Diffusion Engineers IPO?
Diffusion Engineers IPO listed on 04 Oct 2024.