Report of Monitoring Agency for the quarter ended March 31, 2025.
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CRISIL Ratings, the Monitoring Agency, has filed its report on how Diffusion Engineers Limited used the proceeds from its September 2024 IPO (total gross issue size of Rs 157.64 crore; net proceeds of Rs 142.20 crore). As of March 31, 2025, the company had utilized Rs 52.27 crore overall, including Rs 13.16 crore towards issue expenses. Among the stated objects, the Rs 22 crore earmarked for working capital has been fully deployed, Rs 12.19 crore of the Rs 30.39 crore for the new Hingna manufacturing facility has been spent, and Rs 4.92 crore of the Rs 71.38 crore for Unit IV expansion has been spent. No amount has been used for General Corporate Purposes yet. The unutilized Rs 105.70 crore (plus interest) is parked in fixed deposits across banks earning 7.20%-7.86%, with small balances in monitoring and public accounts.
The report flags a delay in capex implementation: the company planned to spend Rs 79.71 crore on objects by FY25 but only managed Rs 52.27 crore, pushing completion of plant and equipment orders to FY26. While no deviation from the stated objects was reported and core working capital is fully funded, shareholders should note that capacity expansion is behind schedule, which could delay future revenue growth tied to the new facilities.