Diffusion Engineers, a provider of engineering solutions, has taken a significant step towards raising capital through an initial public offering (IPO) by submitting preliminary papers to the Securities and Exchange Board of India (SEBI). The IPO is exclusively composed of a fresh issue, involving up to 98,47,000 equity shares, each having a face value of ₹10, as detailed in the draft red herring prospectus (DRHP) filed on December 27.
### Utilization of Funds:
According to the draft documents, the funds garnered from the IPO will be earmarked by Diffusion Engineers for several key purposes. This includes expanding its existing manufacturing facility and establishing a new manufacturing facility in Maharashtra. Additionally, the proceeds will be allocated to meet working capital requirements and support general corporate objectives.
### Company Overview:
Established in 1982, Diffusion Engineers has carved a niche for itself by providing engineering solutions to clients in both domestic and international markets. Headquartered in Nagpur, the company offers a comprehensive range of products and services. This encompasses the production of specialized welding consumables, manufacturing wear plates, and heavy engineering equipment. Furthermore, Diffusion Engineers provides customized repair and reconditioning services for heavy machinery and equipment.
### Market Outlook:
The welding consumables market in India, estimated at around ₹46 billion in fiscal 2023, is projected to reach ₹58-60 billion by fiscal 2026. This growth is attributed to the increasing demand for improved infrastructure, leading to substantial investments in projects such as road construction, bridges, ports, and airports. Similarly, the wear plate market in India, valued at around ₹20 billion in FY23, is expected to witness a Compound Annual Growth Rate (CAGR) of 8.5-9.5%, reaching ₹26 billion in FY26.
### IPO Management:
Unistone Capital Pvt Ltd has been appointed as the exclusive book-running lead manager for the IPO, while Bigshare Services Pvt Ltd will serve as the registrar.
### Listing Information:
Upon successful completion of the IPO, Diffusion Engineers’ equity shares are set to be listed on both the BSE and the National Stock Exchange (NSE).
The IPO marks a crucial financial milestone for Diffusion Engineers and positions the company to capitalize on the robust demand in India’s welding consumables and wear plate markets, further fueling its expansion plans and enhancing its market presence.