DEE Development Engineers Ltd. plans to raise up to Rs 418 crore through its initial public offering, which is set to open on Wednesday. The IPO consists of a fresh issue of 1.6 crore shares worth approximately Rs 325 crore and an offer for sale of 0.46 crore shares amounting to Rs 93 crore.
The company, which operates under the DEE Piping Systems brand, has set a price band of Rs 193–203 per share, with a face value of Rs 10 each for the issue that will close on Friday.
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The minimum lot size for retail investors is 73 shares, requiring an investment of at least Rs 14,819. For small non-institutional investors, the minimum lot size is 14, amounting to Rs 2.07 lakh. The minimum lot size for big non-institutional investors is 67, totaling over Rs 10 lakh, according to the red herring prospectus.
Issue Details
Issue opens: June 19.
Issue closes: June 21.
Issue price: Rs 193 to 203 per share.
Fresh issue: Rs 325 crore.
Offer for sale: Rs 93.01 crore.
Total issue size: Rs 418.01 crore.
Bid lot: 73 shares.
Listing: BSE and NSE.
Investors who bid for the issue can check the Dee Development Engineers IPO allotment status here.
Use Of Proceeds
A major part of the fundraise will be allocated for the repayment of debt. The company plans to utilise Rs 175 crore for the pre-payment or repayment of certain outstanding borrowings.
For working-capital requirements, Rs 75 crore will be allocated, while an equal amount will be for general corporate purposes.
Business
DDEL provides specialised process piping solutions for sectors like oil and gas, power and chemicals. It manufactures piping products, like high-pressure piping systems, piping spools and high-frequency induction pipe bends.
The engineering company has seven manufacturing facilities, including one in Bangkok and three in Palwal, Haryana. It has also recently expanded into a new business vertical to offer, design, engineering, fabricate and manufacture pilot plants at Palwal Facility III.
Financials
Between fiscals 2021 and 2023, DDEL's revenue from operations grew at a compound annual growth rate of 9.66%, reaching Rs 595.5 crore. The company posted a profit of Rs 12.97 crore in the year ended March 2023.
Key Risks
Majority of IPO net proceeds to be utilised to repay or prepay company's indebtedness.
Any downturn in the oil and gas, power, process industries and chemical sectors to impact company's orders, revenues and financial conditions.
Underutilization of manufacturing capacities to have adverse effect on company
Inability to obtain new engineering service contracts to impact financials.
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