Diffusion Engineers files IPO draft papers with SEBI for fresh issue

Diffusion Engineers plans IPO for fund raising

Nagpur-based Diffusion Engineers on January 1 filed a draft red herring prospectus (DRHP) with the capital markets regulator SEBI for raising funds through an initial public offering (IPO).

The IPO comprises only a fresh issue of 98.47 lakh equity shares by the company.

The engineering solutions provider will utilise net issue proceeds mainly on the expansion of its existing manufacturing facility in Nagpur's Khasra, at a cost of Rs 66.6 crore, and the setting up of new a manufacturing facility in Nagpur's Sonegaon for Rs 30.38 crore.

The remainder amount will be used for working capital requirements, estimated at around Rs 22 crore, and general corporate purposes.

Unistone Capital is appointed as the merchant banker for the issue.

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Diffusion Engineers, which manufactures special welding consumables, wear plates and heavy engineering equipment for core industries, recorded a consolidated net profit of Rs 22.15 crore in the year ended March 2023. This marked a jump as compared to Rs 17 crore in the previous fiscal year.

The company's consolidated revenue from operations in FY23 jumped to Rs 254.9 crore, from Rs 204.6 crore in FY22.

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In the first quarter of FY24, its net profit stood at Rs 6.25 crore, and the revenue came in at Rs 65.8 crore.