 "DEE Development makes robust debut, lists 67% higher over its issue price")
DEE Development listing: DEE Development Engineers made a robust stock market debut on Wednesday, with its shares getting listed at Rs 339, a 67 per cent premium over its issue price of Rs 203 on the National Stock Exchange (NSE). On the BSE, the stock of the piping solutions company listed at Rs 325, 60 per cent higher against its issue price.
Post listing, DEE shares moved higher to Rs 357, quoting 76 per cent higher over the issue price on the NSE and BSE. Nearly 12 million shares have, collectively, changed hands on the NSE and BSE till 10:02 AM. In comparison, the Nifty 50 was down 0.09 per cent at 23,699.
DEE, a leading player in the Indian process piping solutions industry, has exposure to a niche sector with high barriers to entry. The company provides specialised process piping solutions for industries such as oil and gas, power (including nuclear), chemicals, and other process industries through engineering, procurement and manufacturing.
The IPO had garnered immense investor interest. The issue saw an overall subscription of 103.03 times. The quota for qualified institutional bidders (QIBs) was booked a whopping 206.54 times. The quota for non-institutional investors was subscribed 149.38 times. The portions reserved for retail investors saw bidding for 23.66 times, data shows.
DEE boasts a strong competitive position with established client relationships and a diverse portfolio of specialised offerings. Notably, the company benefits from a robust order book and consistent financial performance.
However, some key risks necessitate careful consideration. DEE's business is susceptible to downturns in the industries it serves, such as oil and gas, power, and chemicals. Additionally, competition from both domestic and international players presents a challenge. Furthermore, losses incurred by its subsidiaries require monitoring, Swastika Investmart had said in its IPO note.
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Meanwhile, the company has initiated the capacity expansion plans which would help it to increase the financial performance going ahead. Further, the company is also deleveraging its balance sheet by reducing debt.
On industrial front, the Indian pipe process industry has decent growth outlook and is expected to grow at the CAGR of 6.1 per cent between FY23 to FY30 supported by Oil and Gas, Chemicals/Petrochemicals, Ethanol, Biomass and Increasing electricity consumption, SBI Securities said.
On industrial front, the Indian pipe process industry has decent growth outlook and is expected to grow at the CAGR of 6.1 per cent between FY23 to FY30 supported by Oil and Gas, Chemicals/Petrochemicals, Ethanol, Biomass and Increasing electricity consumption, SBI Securities said.
DEE has evolved as one of the key players in the process piping solutions in India, in terms of installed capacity, with a strong focus on automation and process excellence to drive operational efficiencies and offerings to its customers.
DEE’s increased focus on high margin products with additional contributions from modular skids and usage of high-grade materials, forging technology tie-ups with select global OEMs to derive consistent order flow to become a preferred partner for its clients for the next few years, Reliance securities said.