The initial share sale of Diffusion Engineers garnered strong interest from investors even on the final day of bidding, September 30, as the IPO was subscribed 114.5 times despite sharp correction in the secondary market.
The company that makes welding consumables, wear plates and parts, and heavy machinery for core industries launched its IPO on September 26 to raise Rs 158 crore, which solely comprises a fresh issue. The price band was Rs 159-168 per share.
Investors have bought 75.54 crore equity shares during three days of subscription, against the offer size of 65.98 lakh equity shares, bids data available on the exchanges showed.
Non-institutional investors topped the list, buying 207.60 times the part set aside for them, while qualified institutional buyers and retail investors bought 95.74 times and 85.61 times the allotted quotas.
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Employees, too, were aggressive in bidding the issue, picking 95.03 times the reserved portion. The Maharashtra-based company has reserved 50,000 equity shares for its employees who will get shares at a discount of Rs 8 per share to the final IPO price.
Diffusion Engineers, which offers specialised repair and reconditioning services for heavy machinery and equipment, will spend Rs 71.4 crore and Rs 30.4 crore out of the net fresh issue proceeds (total IPO funds less issue expenses) for expansion of existing manufacturing facility, and setting up of a new manufacturing facility in Nagpur, respectively.
Further, Rs 22 crore will be utilised for working capital requirements and the remaining funds for general corporate purposes.
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The company will finalise the basis of allotment of IPO shares by October 1, and the equity shares will be credited to the demat accounts of eligible investors by October 3.
Investors can start trading in its equity shares on the BSE and NSE, effective October 4. Its IPO shares were available at more than 30 percent premium over the upper price band in the grey market, observers said. The grey market is an unofficial market wherein IPO shares can be bought and sold till the listing.
The company operates its business through four manufacturing facilities in Nagpur, Maharashtra. It also involves in trading of anti-wear powders and welding and cutting machinery.
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