The initial public offering (IPO) of DEE Development Engineers Ltd, a piping solutions provider, concluded on June 21, 2024, with remarkable investor enthusiasm. The Rs 418 crore IPO opened on June 19 and saw a subscription rate of 101.20 times, receiving bids for 1,45,52,55,000 shares against the 1,43,79,814 shares on offer. This massive oversubscription highlights strong market confidence in the company’s future growth and potential.
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The IPO’s impressive demand was driven primarily by non-institutional investors, who subscribed to the shares 147.18 times, while retail investors and qualified institutional buyers (QIBs) subscribed 20.99 times and 206.54 times, respectively. This diverse and substantial investor interest reflects a broad-based confidence in the company’s prospects.
The price band for the DEE Piping Systems IPO was set between Rs 193 and Rs 203 per share. According to market observers, the grey market premium (GMP) for the unlisted shares of DEE Development Engineers Ltd was around Rs 95, indicating a potential listing gain of approximately 46.8%. This strong GMP suggests that investors are expecting significant returns from the public issue.
The IPO includes a fresh issue of shares worth up to Rs 325 crore and an offer for sale of up to 45,82,000 equity shares. The funds raised through the IPO are intended to meet the company’s working capital requirements and repay some of its outstanding debt. Despite the company’s declining net worth over the past three years (from Rs 448.50 crore in 2021 to Rs 413.70 crore in 2023) and increasing total borrowings (from Rs 257.17 crore to Rs 352.62 crore in the same period), the firm reported a revenue increase from Rs 513.03 crore in March 2021 to Rs 614.32 crore in March 2023. These figures suggest a strong revenue trajectory despite financial challenges.
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DEE Development Engineers Ltd’s client portfolio includes notable names such as JGC Corporation, Nooter Eriksen, MAN Energy Solutions SE, Mitsubishi Heavy Industries, John Cockerill SA, Reliance Industries, HPCL-Mittal Energy Ltd, and Toshiba JSW Power Systems. This robust clientele provides a solid foundation for future business assurance.
According to VLA Ambala, a SEBI Registered Research Analyst, the current financials of DEE Development Engineers Ltd are not highly lucrative, yet the remarkable oversubscription of its IPO and the significant grey market premium indicate strong investor confidence in its future growth potential. The IPO allotment is likely to be finalized on June 24, with the listing expected on both BSE and NSE on June 26. Ambala suggests that those who missed applying for the IPO could consider buying the stock in the secondary market if there is a dip.
Vijay Laxmi aka VLA Ambala is SEBI registered Research Analyst and her research and view are being published in various media platforms as well- Check here – https://smtstockmarkettoday.com/pr-and-media/
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