DEE Development Engineers sees stellar listing; what should investors do now?

Shares of DEE Development Engineers on expected lines made a strong debut on the stock exchanges today (June 26). The stock against the upper price band of Rs 203 saw a listing pop of 67 per cent on the NSE, listing at Rs 339 per share, while on the BSE it made its stock market entry at Rs 325, a premium of over 60 per cent.

Shivani Nyati, Head of Wealth, Swastika Investmart on the strong listing gains said the stock witnessed a remarkable stock market debut, exceeding pre-listing expectations. This impressive performance surpasses the anticipated strong listing, fueled by the overwhelming investor response during the IPO, she added.

What should investors do after DEE's strong listing?

Nyati is of the view that the company's exceptional listing performance signifies strong investor confidence in the company's future prospects. The company's strong competitive edge, established clientele, diverse product portfolio, robust order book, and consistent financial performance likely fueled investor enthusiasm. However, it's crucial to maintain a balanced perspective now. Though we have a long-term view for this company, a stop-loss level of 300 could be maintained, she added.

Earlier Zee Business Managing Editor Anil Singhvi suggested investors apply for the DEE Piping Systems for reasonable listing gains and the long term. The market guru has identified the following key points about the DEE Piping Systems IPO:

Positives:
Strong promoters & into a niche business
Decent financial performance 
Strong margins
Decent order book

Negatives:
Business size is small compared to peers
The company has a Rs 371 crore debt; although the proceeds from the fresh issue will be used for debt payment
Valuations are reasonable, neither expensive nor very cheap

DEE Development IPO details

DEE Development issue comprised a mix of fresh equity sales aggregating to Rs 325 crore and an OFS worth Rs 93 crore. The offer saw robust investor interest, led by QIB investors,  the category which was booked over 200 times.

Overall, the issue was subscribed 100 times, with retail investor bidding for 23.42 times the quota available for them, while the NII investor category bade for 144 times the subscription.

The fundraise via the issue will be put to funding working capital requirements of the company, 
prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company and other general corporate purposes

DEE Development Engineers was incorporated on March 21, 1988. It is an engineering company providing specialized process piping solutions for industries such as oil and gas, power (including nuclear), chemicals, and other process industries through engineering, procurement, and manufacturing.