Piping solutions company Dee Development Engineers has filed draft papers with the market regulator Sebi to raise funds via an initial public offering (IPO).
The public issue comprises a fresh issue component worth Rs 325 crore by the company and an offer-for-sale (OFS) of 79 lakh shares by promoter Krishan Lalit Bansal.
The Haryana-based company may mop up Rs 65 crore in a pre-IPO placement before the filing of a red herring prospectus with the Registrar of Companies. If the said private placement is undertaken then the fresh issue size will be reduced to the extent of such private placement size.
The firm will make use of net fresh issue proceeds for working capital requirements of Rs 75 crore and repaying debts amounting to Rs 175 crore. The remaining shares will be utilised for general corporate purposes.
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On a consolidated basis, Dee Development Engineers had total outstanding borrowings of Rs 352.62 crore as of March 2023.
The engineering company provides specialised process piping solutions for industries such as oil and gas, power (including nuclear), chemicals and other process industries through engineering, procurement and manufacturing. It also manufactures piping products.
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With six strategically located manufacturing facilities in Haryana, Gujarat, Rajasthan and Thailand, Dee Development claimed to be the largest player in process piping solutions in India, in terms of installed capacity. Its subsidiary, DFIPL also operates a heavy fabrication facility in Gujarat and also has an engineering facility in Chennai.
Its manufacturing facilities had a cumulative installed capacity of 94,500 MT per annum and its capacity utilisation was 43.10 percent in the year ended March 2023.
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The company is in the process of increasing its manufacturing capabilities by setting up a new manufacturing facility in Assam with an installed capacity of 6,000 MT per annum as well as a new manufacturing facility in Gujarat with an installed capacity of 12,000 MT per annum.
On the financials front, Dee Piping Systems has recorded a net profit of Rs 12.97 crore for the fiscal year FY23, up from Rs 8.2 crore in the previous year, and revenue from contracts with customers jumped from Rs 460.9 crore to Rs 595.5 crore during the same period.
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SBI Capital Markets and Equirus Capital are the merchant bankers on the issue.
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