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Dee Development Engineers Limited IPO Details: Date, Share Price, Size, GMP & Review

Dee-Development-Engineers-Limited-IPO-Details-Date-Share-Price-Size-GMP-Review

Dee Development Engineers – About the Company

Dee Development Engineers specializes in process piping solutions for industries like oil and gas, power, and chemicals. The company has over three decades of experience, which has helped them expand their business to include other products like high-pressure piping systems, piping spools, high-frequency induction pipe bends, industrial pipe fittings, etc.

In terms of installed capacity, the company is India's largest player in process piping solutions. They also specialize in handling complex metals like carbon steel, stainless steel, super duplex stainless steel, alloy steel, and other materials. The company has six strategically located manufacturing facilities in Palwal, Haryana, Anjar, Barmer, and Bangkok, with a cumulative installed capacity of 94,500 MT per annum as of fiscal 2023. The company has supplied its products to domestic and overseas customers in various countries, including the USA, Europe, Japan, Canada, the Middle East, Nigeria, Vietnam, Singapore, China, and Taiwan.

Dee Development Engineers IPO Objectives

The Issue comprises of both fresh and the offer for sale (OFS).

  1. The company will not receive any fund from the (OFS). The OFS comprises of up to 4,582,000 Equity Shares, aggregating up to Rs. 93.01 crores.
  2. The Fresh Issue comprises up to Rs. 325 crores and the net Proceeds will be utilised toward following objectives
    • Working capital requirements
    • Payment of outstanding borrowings availed by our Company / Subsidiaries
    • General corporate purposes.

Dee Development Engineers IPO Details:

IPO Open Date June 19, 2024
IPO Close Date June 21, 2024
Basis of Allotment June 24, 2024
Listing Date June 26, 2024
Face Value Rs 10 per share
Price Rs. 193 to Rs. Rs. 203 per share
Lot Size 73 Shares
Total Issue Size 20,591,852 shares
aggregating up to Rs. 418.01 Cr
Fresh Issue 16,009,852 shares
aggregating up to Rs. 325.00 Cr
Offer For Sale 4,582,000 shares
aggregating up to Rs. 93.01 Cr
Issue Type Book Built Issue IPO
Listing At BSE & NSE
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

 

Dee Development Engineers IPO Issue Price & Size

The issue price of Dee Development Engineers is between the price ranges of Rs 193 to Rs 203. The investors can bid between these price ranges during the open and close date of Dee Development Engineers IPO. As per the DRHP offer document, Dee Development Engineers IPO will issue a fresh issue of equity shares of up to Rs 325 crores and an offer-for-sale (OFS) of Rs. 93.01 crores.

Dee Development Engineers IPO Launch Date

The launch date of the Dee Development Engineers IPO is announced from June 19, 2024 till June 21, 2024. All types of investors can bid for the IPO between these dates. Basis of Allotment for Dee Development engineering IPO is announced for June 24, 2024.

Dee Development Engineers Financial Statements:

Particulars For the year ended March 31
2023 2022 2021
Revenue from contracts 5954.95 4609.16 4952.17
Other income 188.25 99.23 178.09
Total Income 6143.2 4708.39 5130.26
Cost of raw materials consumed 2261 1948.97 1984.71
Purchases of traded goods 28.9 11.35 9.57
inventories -387.68 -242.1 370.04
Employee benefits expenses 1109.47 792.98 739.63
Finance costs 299.02 253.37 271.29
Depreciation and amortization expenses 377.27 358.99 355.37
Other expenses 2251.5 1451.89 1311.38
Total expenses 5939.48 4575.45 5041.98
Restated profit for the year 129.72 81.97 142.05
Basic EPS 2.45 1.53 2.44
Diluted EPS 2.45 1.53 2.44

 

Particulars Fiscal 2023 Fiscal 2022 Fiscal 2021
(in Rs. million, except percentages and ratios)
Rev. from contracts 5954.95 4609.16 4952.17
Growth in Rev from contracts 29.20% -6.93% NA
Total Income 6143.2 4708.39 5130.26
EBITDA 691.76 646.07 536.84
EBITDA Margin (%) 11.62% 14.02% 10.84%
Profit Before Tax 203.72 132.94 89.49
Profit Before Tax Margin (%) 3.42% 2.88% 1.81%
Profit for the year 129.72 81.97 142.05
Profit for the year Margin (%) 2.18% 1.78% 2.87%
ROCE (%) 3.91% 3.99% 2.47%
RONW (%) 3.14% 2.04% 3.17%
Net Debt 3198.28 2600.86 2246.77
Net Debt to Total Equity 0.75 0.63 0.49
Order Book 5633.53 4345.7 3356.78

 

Dee Development Engineers IPO Promoters & Shareholding of the Company

Dee Development Engineers has only one promoter, Krishan Lalit Bansal (MD and Chairman). The promoter holds 74.74% of the paid-up equity share capital of the company. The promoter along with promoter group holds 100% of the paid-up equity share capital of the company.

Particulars Number of

Equity Shares held

% of the pre-Offer paid-up

Equity Share capital

Promoter (also the Selling Shareholder)
Krishan Lalit Bansal 39639.19 74.74
Total (A) 39639.19 74.74
Promoter Group
DDE Piping Components Pvt Ltd. 752275 14.2
Ashima Bansal 4399900 8.3
Shruti Aggarwal 50 Negligible
Shikha Bansal 1467130 2.76
DEE Group Trust 500 Negligible
Total (B) 13399855 25.26
Total (A + B) 53039040 100

Why Invest in Dee Development Engineers IPO?

While investing in an IPO-bounded company, one should check their fundamentals that help an investor to Visions Company’s financial performance and competitive strength which at last drives its business growth. Fundamental analysis apart from financial and competitive strength, also help you to know the risk factors that can affect the business operations and future prospects of the company. After evaluating the variables such strength weakness, financials, you may strike a balance and decide to invest or not invest in an IPO.

Competitive Strengths:

Leading player in an industry with significant barriers to entry

The company offering specialized process piping solutions for industries like oil & gas, power requires significant level of technical skill and knowhow, which creates entry barrier for new entrants. The process piping solutions industry faces high entry barriers due to the following reasons:-

  • Technical Knowhow
  • Developing in-house engineering processes
  • High initial investment
  • Need for skilled labor
  • Complex manufacturing technology

Largest player in India's process piping solutions

The company with cumulative installed capacities of 94,500 MT per annum, is a leading process pipe solution provider in the world, with six strategically located manufacturing facilities in India. The facilities spread over an area of approx. 425,578.54 square meters with capacity utilization at 43.10% as of 2023.

There manufacturing facilities are strategically located for facilitating certain type of market and industry like the proposed New Anjar Facility and the Bangkok Facility are strategically located with access to ports, making them ideal for overseas customers.

Facilities Fiscal 2023
Installed Capacity Capacity Utilization (in %)*
Palwal Facility I 9000 5.62%
Palwal Facility II 3000 67.13%
Palwal Facility III 24000 78.84%
Barmer Facility 5000 55.04%
Anjar Facility I 3000 41.60%
Bangkok Facility 14500 39.34%
Anjar Heavy Fabrication Facility 36000 26.63%

 

Long standing customer relationships with a strong order book

The company has mix of domestic and overseas customers, including some of the clients from Fortune 500 companies like Reliance Industries. As of FY23, the company had order book of Rs. 578.7 crores, which constituted 97.19% of revenue from contracts.

The table below shows the breakdown of order book from domestic and overseas customers, along with a % of the order book details against revenue from contracts in preceding years.

Sectors in which our customers operate Order book contribution (in Rs. million) as of June 30, 2023 As a % of revenue from contracts with customers in Fiscal 2023
Oil and gas 3495.7 58.70%
Power 2127.26 35.72%
Process Industries 164.42 2.76%
Total 5787.38 97.19%

 

Customers Order book contribution

 (in Rs. million)

as of June 30, 2023

As a % of revenue from contracts

 with customers in Fiscal 2023 (%)

Domestic customers 2979.78 50.04%
Overseas customers 2807.6 47.15%
Total 5787.37 97.19%

 

Customers Fiscal 2023 Fiscal 2022
Revenue contribution

(in Rs. million

As a % of total revenue from contracts with customers Revenue contribution

(in Rs. million

As a % of total revenue from contracts with customers
Largest customer 822.17 13.81% 781.54 16.93%
Top 10 customers 3928.08 65.96% 3374 73.20%
Top 20 customers 5159.73 86.65% 4188.141 90.87%

 

Wide range of specialized offerings

The company offers diversified product portfolio includes piping spools, induction pipe bends, industrial pipe fittings, pressure vessels, modular piping, industrial stacks, wind turbine towers, and pilot plants.

Wide-range-of-specialized-offerings

Focus on automation and process excellence

Their facilities are equipped with a mix of automation and manual processes. The company plans to combine its engineering capabilities with capital expenditure to induce productivity, cost control, and consistent product quality. In FY23, FY22 and FY21, the capital expenditure compared to revenue were 12.24%, 5.78%, and 3.61%.

Risks Factors:

Downturn in the oil and gas, power industry could impact revenue

As can be seen from the table below, company's revenue contribution from customers is highly dependent on oil and gas & power sector. Any effect on the raw material related to these sectors can have adverse effect on business.

Factor that could have adverse affect to the company are mentioned below

  • Fluctuations in oil and gas prices
  • Seasonality of sectoral demand
  • Failure by customers to market their products
  • Regulatory bans
  • Trade sanctions
  • Economic conditions of targeted market
Sectors Fiscal 2023 Fiscal 2022 Fiscal 2021
% of total revenue from contracts % of total revenue from contracts % of total revenue from contracts
Oil and Gas 51.35% 42.39% 32.52%
Power 34.16% 39.81% 44.79%
Power Generation through Biomass Generation Plant 12.41% 17.02% 13.33%
Process Industries 2.01% 0.78% 4.62%
Chemical 0.07% 0.00% 4.74%

 

Competition and innovation

Even though this industry has high barriers to entry, none the less this industry face competition from established players like L&T Heavy Engineering's pipe fabrication division, a Seonghwa Industrial Co. Limited, etc.  The success of the business depends on anticipating and identifying customer preferences, offering products and services that customers require. So the company has to constantly strive to develop innovation capabilities to introduce new products and services based on customer preferences and demand.

Dee Development Engineers IPO Grey Market Premium (GMP)

The DEE Development Systems IPO Grey Market Premium is trading Rs. 40. The price will be disclosed and as per the demand and supply of the share price in the open market, the Dee Development Engineers IPO GMP will be known. If the IPO price is undervalued, less GMP and as per the valuation of the stock overvalued there is less chance for higher GMP.

How to Apply for Dee Development Engineers Limited IPO?

If you have a share trading and demat account at Moneysukh, you can easily apply for the Dee Development Engineers Limited IPO. Just follow the steps given below.

Step 1: Once Dee Development Engineers Limited IPO opens you can apply online.

Step 2: Browse at trade.moneysukh.com and log in with your Moneysukh User ID & password.

Step 3: Now you have to visit the IPO section and select Dee Development Engineers Limited IPO.

Step 4: Here just fill in the required such as bidding price, quantity or lot and so on.

Step 5: Now you have to make the payment and your IPO application is successful.

How to Check Dee Development Engineers Limited IPO Allotment Status?

Just like applying, checking the Dee Development Engineers Limited IPO Allotment Status is also very easy and hassle-free through Moneysukh online platform. You have to just wait till the IPO is closed and the allotment is finalized. If you have been allotted any share it will be transferred into your demat account that you can sell after listing of the shares on the NSE or BSE stock exchanges.

Also Read: How to Increase the Chances of IPO Allotment

However, if IPO is oversubscribed and unfortunately if you have not been allotted any share, your IPO application money will be returned to your bank account or linked account where you have allocated the fund while applying for the Dee Development Engineers IPO.

Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh

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