Thu Sep 26 09:46:33 UTC 2024: ## Diffusion Engineers IPO Oversubscribed on Day One, Employee Demand Strong

**Nagpur, India – September 28, 2023** – Diffusion Engineers Ltd., a leading manufacturer of welding consumables and heavy engineering machinery, saw a strong response to its initial public offering (IPO) on Thursday. The IPO was subscribed 5.02 times by 2:27 p.m. on the first day of bidding, with employee demand particularly strong, reaching 12.71 times subscription.

The company is looking to raise Rs 158 crore through the fresh issue, with no offer for sale component. The price band has been set at Rs 159-168 per share, with the issue closing on September 30 and listing expected on October 4.

The company’s market value at the upper end of the price band stands at Rs 629 crore. Diffusion Engineers plans to use the proceeds from the IPO to fund capital expenditure for expanding its existing manufacturing facility, setting up a new facility, and meeting working capital requirements.

Established in 1982, Diffusion Engineers is known for its superconditioning process, a surface treatment solution that enhances wear resistance, eliminates stress, and improves repairability of machine components, ultimately extending their lifespan and reducing production costs. The company operates from four manufacturing units located in Nagpur, Maharashtra.

While the company currently relies heavily on the domestic market for its sales, any downturn could negatively impact its market share. The company also had negative cash flows during certain fiscal years, and its business is working capital intensive. Any insufficient cash flow from operations or inability to borrow to meet working capital requirements could significantly impact its business and results.

Despite these challenges, the strong response to the IPO suggests investor confidence in the company’s growth prospects. The grey market premium (GMP) for Diffusion Engineers was Rs 90 as of 1:24 p.m., implying a 53.57% gain over the IPO price, according to Investorgain. The estimated listing price based on the GMP is Rs 258 per share. It’s important to note that GMP is not an official price quote and is based on speculation.

Investors will be closely watching the IPO’s performance in the coming days to see if it can sustain its initial momentum.

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