IPO Listing News: The Initial Public Offering (IPO) of Diffusion Engineers has proved to be a profitable deal for investors. The company’s stock was listed on BSE today at Rs 188, while the IPO price was Rs 168. At the same time, it strengthened to Rs 197 during intraday. That means investors who got shares in IPO have made 17 percent profit. The question is whether the shares should be sold after earning profits or held for more profits. This IPO was open from September 26 to September 30 and it received 114.50 times subscription.
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What should investors do?
Shivani Nyati, Head of Wealth, Swastika Investmart, says Diffusion Engineers Ltd, which manufactures heavy machinery, wear plates and parts and welding consumables for core industries, has had a quiet debut in the stock market. Business functions within an emerging industry with substantial investment in infrastructure and industrialization. The organization is prepared for future growth by prioritizing further entry and diversification. The financial growth of the company is stable and profits are increasing. Those who had invested in the IPO and were allotted shares can hold the company’s shares for further time by carefully monitoring the company’s performance and market conditions, as well as maintaining a stop loss at the IPO price.
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What is the business of the company?
Diffusion Engineers was started in 1982. It is involved in the business of manufacturing welding consumables, wear plates and wear parts and heavy engineering machinery for core industries. The company provides superconditioning processes at its manufacturing facilities, surface treatment solutions for machine components that increase wear resistance, reduce stresses and improve repairability, thereby increasing their lifespan and reducing cost of production. At present the company operates from four manufacturing units. Of these, Units I, II and III are located in Nagpur Industrial Area of Nagpur. While Unit IV is in Khapri, Nagpur.
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Risk Factors with Company
However, the company is dependent on the domestic market for its sales. Any decline in this may affect the market share. The company has had negative cash flow in some financial years. The company’s business is working capital intensive. Any inadequate cash flow from its operations or inability to borrow to meet its working capital needs could have an adverse impact on its business and operations.
(Disclaimer: The view or advice on the share is given by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert opinion before investing.)