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Company Background
Dee Development Engineers Ltd was initially incorporated as “DE Development Engineers Private Limited” on March 21, 1988. It was later renamed “DEE Development Engineers Private Limited” on January 8, 1998, before converting to a public limited company on March 11, 2010. The company specializes in providing process piping solutions for industries such as oil and gas, nuclear power, chemicals, and other process industries. Their services include engineering, procurement, and manufacturing of piping products and solutions.
IPO Details
| Particulars | Details |
|---|---|
| IPO Issue Period | June 19, 2024 – June 21, 2024 |
| Issue Price Band | ₹193 – ₹203 per equity share |
| Market Lot | 73 shares |
| Total IPO Size | ₹418.01 Crore |
| Minimum Order Quantity | 73 shares |
| IPO Issue Type | Book Building Issue IPO |
| Face Value | ₹10 per equity share |
| Listing At | BSE, NSE |
| Fresh Issue | 16,009,852 shares (₹325.00 Cr) |
| Offer for Sale | 4,582,000 shares (₹93.01 Cr) |
| Employee Discount | ₹19 per share |
| Shareholding Pre-Issue | 53,039,140 shares |
| Shareholding Post-Issue | 69,048,992 shares |
IPO Lot Size
Investors can bid for a minimum of 73 shares and in multiples thereof. The below table depicts the minimum and maximum investment by retail investors and HNI in terms of shares and amount.
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (Min) | 1 | 73 | ₹14,819 |
| Retail (Max) | 13 | 949 | ₹192,647 |
| S-HNI (Min) | 14 | 1,022 | ₹207,466 |
| S-HNI (Max) | 67 | 4,891 | ₹992,873 |
| B-HNI (Min) | 68 | 4,964 | ₹1,007,692 |
Key Dates
- Opening Date: June 19, 2024
- Closing Date: June 21, 2024
- Finalisation of Basis of Allotment: June 24, 2024 (Tentative)
- Initiation of Refunds: June 25, 2024 (Tentative)
- Transfer of Shares to Demat Account: June 25, 2024 (Tentative)
- Listing Date: June 26, 2024 (Tentative)
IPO Reservation
| Investor Category | Shares Offered |
|---|---|
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not less than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Financial Performance
Standalone Figures (in ₹ Crore)
| Financial Year | FY23 | FY22 | FY21 | FY20 | FY19 |
|---|---|---|---|---|---|
| Total Assets | 695.58 | 622.32 | 620.59 | 687.61 | 769.81 |
| Sales | 502.70 | 370.33 | 411.45 | 619.69 | 519.43 |
| Direct Expenditure | 284.20 | 218.59 | 218.82 | 421.36 | 326.02 |
| Gross Profit | 218.50 | 151.74 | 192.63 | 198.33 | 193.41 |
| Operating Expenditure | 140.04 | 92.41 | 127.57 | 103.53 | 102.52 |
| Operating Profit | 78.46 | 59.33 | 65.06 | 94.80 | 90.89 |
| Other Income | 22.80 | 17.68 | 16.28 | 18.39 | 19.20 |
| Interest | 28.69 | 21.67 | 21.90 | 34.24 | 25.32 |
| Depreciation | 24.22 | 22.15 | 22.13 | 20.92 | 18.54 |
| Profit Before Tax | 25.55 | 15.51 | 21.03 | 39.64 | 47.03 |
| Tax | 6.96 | 3.20 | -1.09 | 12.07 | 15.32 |
| Profit After Tax | 18.59 | 12.31 | 22.12 | 27.57 | 31.71 |
| EPS (unadjusted) | 17.52 | 11.60 | 14.09 | 17.57 | 20.21 |
Consolidated Figures (in ₹ Crore)
| Financial Year | FY23 | FY22 | FY20 |
|---|---|---|---|
| Total Assets | 921.89 | 811.10 | 900.80 |
| Sales | 595.50 | 460.92 | 722.51 |
| Direct Expenditure | 380.97 | 299.07 | 463.16 |
| Gross Profit | 214.53 | 161.85 | 259.35 |
| Operating Expenditure | 122.08 | 84.55 | 156.79 |
| Operating Profit | 92.45 | 77.30 | 102.56 |
| Other Income | 18.83 | 9.92 | 16.13 |
| Interest | 34.35 | 28.10 | 42.58 |
| Depreciation | 37.73 | 35.90 | 32.83 |
| Profit Before Tax | 20.37 | 13.30 | 27.15 |
| Tax | 7.40 | 5.10 | 14.52 |
| Profit After Tax | 12.97 | 8.20 | 12.63 |
| EPS (unadjusted) | 12.23 | 7.73 | 8.52 |
Use of Proceeds
The net proceeds from the IPO are proposed to be utilized for the following purposes:
- Funding working capital requirements of the company.
- Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company and its subsidiary DEE Piping Systems (Thailand) Co Ltd and DEE Fabricom India Pvt Ltd.
- General corporate purposes.
SWOT Analysis
Strengths
- Diverse Product Portfolio: Dee Development Engineers Ltd offers a comprehensive range of process piping solutions and specialized products, catering to various high-demand industries.
- Strategic Manufacturing Locations: The company operates six strategically located manufacturing facilities in India and Thailand, enhancing its production and supply chain efficiencies.
- Experienced Management Team: With years of industry experience, the management team has successfully steered the company through various market conditions.
Weaknesses
- High Dependence on Specific Industries: The company’s focus on industries like oil and gas, and nuclear power, can expose it to sector-specific downturns.
- Significant Debt Levels: The company has considerable outstanding borrowings, impacting its financial flexibility.
Opportunities
- Growing Demand for Process Piping Solutions: Increasing industrialization and investments in infrastructure projects can drive demand for the company’s products and services.
- Expansion into New Verticals: Recent diversification into designing and manufacturing pilot plants can open new revenue streams and markets.
Threats
- Economic Slowdown: An economic downturn could adversely affect the industries served by Dee Development Engineers, impacting its revenue.
- Intense Competition: The company faces significant competition from both domestic and international players in the process piping solutions market.
Conclusion
Dee Development Engineers Ltd’s IPO presents an opportunity for investors to participate in a company with a strong presence in the process piping solutions market. However, potential investors should consider the company’s financial performance, use of IPO proceeds, and SWOT analysis before making investment decisions.
Source of financials: Dee Development Engineers Ltd IPO – Allotment, Status, Price, Listing Date, Subscription | Nuvama (nuvamawealth.com)
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Disclaimer
This article is for informational purposes only and does not constitute financial advice. Potential investors should consult with their financial advisors before making any investment decisions. All information has been sourced from reliable publications and the company’s IPO prospectus. However, we do not guarantee the accuracy or completeness of this information.
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