DEE Development Engineers Ltd to Enter Stock Exchange with Upcoming IPO

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DEE Development Engineers Ltd IPO: This ₹418.01 crore offering comprises a fresh issue of shares valued at ₹325 crore and an offer for sale (OFS) component totaling up to ₹93 crore. The price band for DEE Piping Systems IPO is set between ₹193 and ₹203 per share, with the bidding period closing on June 21, 2024.

The initial public offering (IPO) of DEE Piping Systems (DEE Development Engineers Limited) opened for subscription on Wednesday, June 19, and will remain open until Friday, June 21. The company, which specializes in providing process piping solutions and manufacturing industrial pipe fittings and accessories for industries such as oil and gas, chemicals, and electricity, has set the price band for the IPO at ₹193 to ₹203 per equity share.

DEE Development Engineers announced on Tuesday that it has secured more than Rs 125 crore from anchor investors in a filing with the exchange.

The engineering firm said that it had allocated 61,62,777 equity shares to anchor investors at a price of Rs 203 per share.

Retail investors have shown strong interest, bidding 0.79 times their allotted quota, while non-institutional investors (NIIs) have subscribed 0.73 times their portion. Qualified institutional buyers (QIBs) have not yet placed any bids.

The total IPO size is ₹418.01 crore, consisting of a fresh issue of shares worth ₹325 crore and an offer for sale (OFS) component totaling up to ₹93 crore. Investors can bid for a minimum lot size of 73 shares and in multiples thereof.

All About DEE Development Engineers Ltd

DEE Development Engineers Limited was founded by Chairman & Managing Director Mr. K.L. Bansal in 1988. We are an engineering company that specializes in providing process piping solutions for various industries including oil and gas, power (including nuclear), chemicals, and other process industries. Our services encompass engineering, procurement, and manufacturing.

With over three and a half decades of manufacturing experience, we have leveraged our brand, strategically located manufacturing facilities, and engineering capabilities to successfully expand our business. Our specialized process piping solutions include the manufacture and supply of products such as high-pressure piping systems, piping spools, high-frequency induction pipe bends, LSAW pipes, industrial pipe fittings, pressure vessels, industrial stacks, modular skids, and accessories. These accessories include boiler superheater coils, de-superheaters, and other customized components.

DEE is an ISO certified company and a certified manufacturer of Pipe Spools, Pipe Supports, and Pipe Fittings under the Pressure Equipment Directive (PED) norms, ASME Code Stamp Piping, Indian Boiler Regulations, and the Canadian Welding Bureau. Additionally, we manufacture industrial pipe fittings registered under the Canadian Registration Number.

DEE Development Engineers IPO: Key Financials

DEE Development Engineers has demonstrated significant growth in recent years. The company’s revenue increased from ₹495 crore in FY21 to ₹595 crore in FY23, despite a slight decline to ₹460 crore in FY22. In the third quarter of FY24, DEE Development Engineers reported a revenue of ₹545 crore.

In terms of profitability, the company posted a net profit of ₹14.2 crore in FY21, experienced a dip to ₹8.19 crore in FY22, and recovered to ₹12.9 crore in FY23.

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DEE Piping Systems IPO: Timeline

• Bidding dates: June 19 to June 21
• Allotment finalisation: June 24
• Refund initiation: June 25
• Transfer of shares to demat account: June 25
• Listing: June 26

Strengths of DEE Development Engineers Ltd:

• The company has maintained long-term relationships with its key customers in the Indian and global markets. For instance, it has been associated with Reliance and Mitsubishi Heavy Industries for 12 years.
• Since the company offers specialised process piping solutions, clients do not easily switch to different suppliers, which creates an entry barrier for new players in the industry.

Weaknesses of DEE Development Engineers Ltd:

• The company’s revenue is highly concentrated . Its top 10 customers contributed 66 per cent to its total revenue as of 9M FY24.
• DEE Development Engineers has high working capital requirements , with receivable days and inventory days of 99 and 181, respectively. Over the last three years, the company has had to rely on short-term debt to grow its business. As a result, its short-term debt grew from Rs 206 crore in FY21 to Rs 325 crore as of 9M FY24.
• The business is cyclical and highly dependent on the oil and gas sector and the government’s infrastructure push. Moreover, its margins significantly depend on steel prices, which is a key raw material.
  

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