Diffusion Engineers IPO subscribed 7.16 times on day 1, grey market premium jumps

Diffusion Engineers IPO

The Rs 158-crore initial public offering of Diffusion Engineers was fully subscribed on the first day of bidding, September 26, signalling significant interest in the issue. Investors bought 4.72 crore equity shares, higher by 7.16 times over the offer size of 65.98 lakh equity shares.

The company that provides specialized repairs and reconditioning services for heavy machinery and equipment, targets to raise Rs 158 crore solely via a fresh issue at the upper end of price band of Rs 159-168 per share. Thus, the entire IPO proceeds (excluding issue expenses) will go to the company.

Retail investors were at the forefront, bidding 11.24 times the allotted quota, followed by non-institutional investors who bought 6.8 times the reserved portion. Qualified institutional buyers picked only three percent shares of the part set aside for them.

Employees were aggressive in bidding as they bought 8.33 lakh shares, higher by 16.67 times compared to their reserved portion of 50,000 equity shares. They will receive shares at a discount of Rs 8 per share to the final issue price.

Also read: IT solutions provider Mouri Tech files draft papers for Rs 1,500-crore IPO

The Maharashtra-based welding consumables, wear plates and parts, and heavy engineering machinery manufacturing company has mopped up Rs 47.15 crore via anchor book on September 25. Four institutional investors including HDFC MF's Defence and Dividend Yield Funds picked 28.06 lakh shares at a price of Rs 168 per share.

The IPO funds will be utilised for the expansion of existing manufacturing facility, and setting up of a new manufacturing facility at Nagpur, Maharashtra. Further, the fresh issue money will also be used for working capital requirements, and general corporate purposes.

Also read: India's IPO market over-heated, upcoming 'K-pop' issues will drain liquidity, says Ramesh Damani

The issue will close on September 30.

Grey Market Premium

Meanwhile, Diffusion Engineers attracted strong interest even from grey market investors as the market observers said the IPO shares were available at around 50 percent premium in the grey market (unofficial market for trading in IPO shares till the listing), increasing from around 45 percent before the opening of issue.

The trading in equity shares will commence on the BSE and NSE, effective October 4.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.