Diffusion Engineers Limited Submitted DRHP With SEBI

The welding consumables manufacturer Diffusion Engineers Limited has filed a draft red herring prospectus (DRHP) with the market regulator, the Securities and Exchange Board of India (SEBI), to raise funds via public issue or initial public offering (IPO). Diffusion Engineers IPO is a 100% fresh issue comprising 98,47,000 equity shares of face value ₹10.

Diffusion Engineers Limited has appointed Unistone Capital Private Limited as the Book Running Lead Manager and Bigshare Services Private Limited as the registrar of the issue.

Purpose of Diffusion Engineers IPO

The company would use the proceeds raised from the IPO for the following:

• Funding capital expenditure requirements towards the expansion of its existing manufacturing facility.
• Setting up a new manufacturing facility.
• Funding the company’s working capital requirements.
• General Corporate Purpose.

Business Overview

Incorporated in 1982, Diffusion Engineers Limited is involved in the manufacturing of welding consumables, wear plates and, wear parts and heavy engineering machinery for core industries. The company is also engaged in trading anti-wear powders and welding and cutting machinery. Diffusion Engineers provide a super conditioning process at their manufacturing facilities, a surface treatment solution for machine components that enhances wear resistance, eliminates stress and improves their repairability, ultimately extending their lifespan and reducing production costs.

During FY 2023, the Indian welding consumables market in India was estimated at ₹46 billion, and the market is likely to reach the range of ₹58-60 billion by FY 2026. The growth will be supported by the rise in demand for improved infrastructure, and a lot of investment is happening in infrastructure development, such as the construction of roads, bridges, ports, and airports. In addition, the wear plates market in India is valued at ₹20 billion in FY23 and is expected to grow at a CAGR of 8.5-9.5% to reach ~₹26 billion in FY26.

Looking forward, the company is focused on strategic expansion by venturing into nickel, cobalt, and iron-based powder manufacturing for an enhanced welding consumables portfolio. The company would also be focused on extending its geographical reach and diversifying its anti-wear solutions and heavy engineering equipment business into new industries.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.