Diffusion Engineers makes a strong debut

Key Takeaways from the Debut

• The IPO of Diffusion Engineers saw strong demand, being subscribed 54.24 times, with a price band set between Rs 159 and Rs 168 per share.
• Funds raised will be allocated for expanding existing manufacturing units, setting up new facilities, working capital, and general corporate needs.
• The company's focus lies in manufacturing specialised industrial equipment like welding consumables and wear plates, with a focus on innovation to enhance wear resistance and reduce production costs.

The scrip was listed at Rs 193, exhibiting a premium of 14.88% to the issue price on NSE.

The IPO comprised a fresh issue of 9,405,000 equity shares of Rs 10 face value. The initial public offer (IPO) of Diffusion Engineers was subscribed 54.24 times. The issue opened for bidding on 26 September 2024 and was closed on 30 September 2024. The price band of the Diffusion Engineers IPO was fixed between Rs 159 and Rs 168 per share.

Out of the total funds from the fresh issue, around Rs 71.38 crore will go towards expanding the existing manufacturing facility (Unit IV) at Khapri (Uma) in Nagpur; Rs 30.385 crore will be used to build a new manufacturing facility at Hingna in Sonegaon District, Maharashtra, Rs 22 crore will be allocated for working capital needs; and the remaining amount will be used for general corporate purposes.

About Diffusion Engineers

Diffusion Engineers, led by Prashant Garg, specialises in manufacturing industrial components such as welding consumables, wear-resistant plates, and heavy machinery tailored for key industries. The firm offers advanced repair solutions and surface treatment processes designed to extend the lifespan of machinery components, reducing wear and tear, improving durability, and cutting down on operational costs. In addition to manufacturing, Diffusion Engineers provides reconditioning services and trades in specialised welding and cutting equipment.

Key Takeaways from the Order Win 

• Orient Cement has accepted a work order from MPPGCL to install a Clinker Grinding Unit at Satpura Thermal Power Station.
• The agreement includes a 25-year Fly Ash supply contract.
• Additional agreements, such as the Land Use Permission Agreement (LUPA), will be signed shortly.

This follows the company’s earlier submission dated February 5, 2024, where MPPGCL approved the proposal for the installation.

The work order also includes a Fly Ash supply contract, which will be in effect for 25 years. The company has confirmed its acceptance and will soon finalize other agreements, including the Land Use Permission Agreement (LUPA).

The project reflects Orient Cement’s growing expansion efforts and reinforces its partnership with MPPGCL for long-term infrastructure developments.

About CK Birla Group 

The CK Birla Group is an Indian multinational conglomerate with over $3 billion in revenue and more than 35,000 employees. It operates 52 manufacturing facilities in India and globally, across various industries such as technology, automotive, home and building, and healthcare. The group’s key companies include Birlasoft Limited, GMMCO Limited, National Engineering Industries (NBC Bearings), Orient Cement, HIL Limited, Orient Electric, CK Birla Healthcare (CK Birla Hospitals and Birla Fertility & IVF), Orient Paper & Industries, AVTEC Limited, and Neosym Industry.

About Orient Cement

Founded in 1979, Orient Cement was previously part of Orient Paper & Industries before becoming an independent entity in 2012. Orient Cement has fast come to become one of India's biggest cement makers. The company began its cement business operations in 1982 at Devapur, Telangana, and further consolidated its power with a split grinding unit at Nashirabad, Maharashtra, in the year 1997. Thereafter, the company established an integrated cement plant in Chittapur, Karnataka, in the year 2015. Total capacity of 8.5 MTPA: Orient Cement serves Maharashtra, Telangana, Andhra Pradesh, Karnataka, parts of Madhya Pradesh, Tamil Nadu, Kerala, Gujarat, and Chhattisgarh.

Orient Cement produces Pozzolana Portland Cement (PPC) and Ordinary Portland Cement (OPC) under the brand names Birla A1 Premium Cement, Birla A1 StrongCrete, Birla A1 OrientGreen, and Birla A1 Dolphin. The company is recognised for its focus on product quality, holding multiple certifications, including QMS ISO 9001:2015 and EMS ISO 14001:2015. It is one of only two Indian cement companies awarded the prestigious Total Plant Maintenance (TPM) excellence award by the Japan Institute of Plant Maintenance and has received numerous accolades for its green and safety practices.

Key Takeaways from Capital Small Finance Financial Highlights:

• Gross advances reached Rs 6,718 crores as of September 30, 2024, up 5% quarter-on-quarter and 15% year-on-year.
• Gross non-performing assets (NPAs) stood at 2.6%, improving from 2.7% in the previous quarter and the same quarter last year.
• Total deposits amounted to Rs 7,780 crores, reflecting an 11% increase year-on-year, with a CASA ratio of 37.1%.
• The loan-to-deposit ratio was 82.4%, and the average liquidity coverage ratio (LCR) was 238.1% for the quarter.

The bank's asset quality is strong, with gross non-performing assets (NPAs) at 2.6%, down from 2.7% in both the previous quarter and the same quarter last year. 

Total deposits stood at Rs 7,780 crores, showing an 11% year-on-year growth. The bank maintains a CASA (Current Account Savings Account) ratio of 37.1%, slightly down from 37.8% a year ago. 

The loan-to-deposit ratio for the quarter was 82.4%, compared to 79.6% in the previous quarter and 79.1% a year earlier. 

The average liquidity coverage ratio (LCR) was 238.1%, an increase from 215.5% in the previous quarter but lower than 246.1% in the same quarter last year. 

Capital Small Finance Bank Limited:

Capital Small Finance Bank, based in Jalandhar, Punjab, started operations as India’s first small finance bank (SFB) in April 2016 after transitioning from Capital Local Area Bank, which had been the largest local area bank in India since January 2000. The bank focuses on providing affordable credit to middle-income customers across its operating states and has established itself as a key player among small finance banks in India. Over the years, it has improved its performance in areas like asset quality, funding costs, retail deposits, and CASA deposits. With over two decades of banking experience, the bank offers a wide range of financial products, including loans for agriculture, micro, small, and medium enterprises (MSMEs), as well as mortgages primarily for housing.

Capital Small Finance Banks strong growth and excellent asset quality, compared to other small finance banks, are due to its well-diversified loan portfolio, focus on secured lending, and commitment to customer engagement. The bank employs structured underwriting practices and strict credit assessment and risk management strategies. Additionally, it uses technology to enhance digital payment options and improve communication with customers, all aimed at enriching the overall customer experience through greater technological integration.

Key Takeaways from HDFC Bank’s Financial Update:

• HDFC Bank's advances under management reached Rs 26,335 billion, up 8% a year ago and a 2.3% rise from June 2024.
• Total gross advances stood at Rs 25,190 billion, up 7.0% from Rs 23,546 billion a year earlier, with Rs 192 billion securitised or assigned during the quarter.
• Deposits were reported at Rs 25,000 billion, a 15.1% growth compared to Rs 21,729 billion a year ago and a 5.1% increase from Rs 23,791 billion at the end of June 2024.
•  Average advances under management for the quarter were Rs 25,630 billion, reflecting a 10.2% growth year-on-year, while the liquidity coverage ratio averaged around 127%.

During the quarter, retail loans grew by approximately Rs 338 billion, while commercial and rural banking loans increased by around Rs 380 billion. However, corporate and other wholesale loans decreased by Rs 133 billion compared to June 2024.

The bank's total gross advances were about Rs 25,190 billion, up 7.0% from Rs 23,546 billion a year ago. The bank also securitised or assigned loans worth Rs 192 billion during the quarter.

In terms of deposits, HDFC Bank reported Rs 25,000 billion as of September 30, 2024, which is a 15.1% growth compared to Rs 21,729 billion a year ago and a 5.1% increase from Rs 23,791 billion at the end of June 2024. CASA (Current Account Savings Account) deposits stood at Rs 8,835 billion, rising 8.0% from Rs 8,177 billion a year ago, while time deposits increased by 19.3% to Rs 16,165 billion.

The average advances under management for the September quarter were Rs 25,630 billion, reflecting a 10.2% growth year-on-year. The bank's liquidity coverage ratio averaged around 127% for the quarter.

About HDFC Bank Limited:

HDFC Bank Limited was established in August 1994, with its headquarters in Mumbai, India. It began operations as a Scheduled Commercial Bank in January 1995. On April 4, 2022, a merger was announced between HDFC Bank and HDFC Limited, India's largest housing finance company. HDFC Limited has built a strong reputation over 45 years, offering a wide range of housing finance products. This merger allows HDFC Bank to provide seamless home loan services as part of its extensive product offerings, serving customers in urban, semi-urban, and rural areas.

As of August 31, 2024, HDFC Bank has a distribution network that includes 8,919 branches and 21,031 ATMs or cash recycling machines across 3,836 cities and towns. The bank also operates internationally with branches in Hong Kong, Bahrain, and Dubai, as well as an IFSC Banking Unit in Gujarat. Additionally, it has representative offices in Kenya, Abu Dhabi, Dubai, London, and Singapore, which were previously offices of HDFC Limited. These offices help facilitate housing loans in India and assist customers in purchasing properties in the country.