Denta Water and Infra Solutions Limited, established in 2016, is a growing player in water and infrastructure solutions. Specializing in groundwater recharging projects and water treatment plant operations, the company serves various sectors, including railway and highway construction. Its focus on environmentally sustainable water management projects positions it as an industry leader.

The IPO consists of a fresh issue of 75 Lakh shares, valued at ₹220.50 Crores. The price band for the IPO is set between ₹279 and ₹294 per equity share, with a market capitalization of ₹784.98 Crores at the upper price band. Retail investors need to invest a minimum of ₹14,700, and HNIs must invest a minimum of ₹2,05,800 (14 lots).

Subscription and GMP Trends
As of January 22, 2025, Denta Water's IPO is subscribed 1.74 times, indicating strong investor interest. The Grey Market Premium (GMP) is ₹110, which translates to a potential listing gain of 37.41%. This signals positive sentiment in the market and the likelihood of significant gains upon listing.

Anchor Investors
Denta Water has raised ₹66.15 Crores from anchor investors at a price of ₹294 per share. A total of 22,50,000 shares were allocated to anchor investors, further affirming the confidence in the company’s prospects.

Financial Overview
Denta Water's revenue growth is promising, with revenues of ₹985.10 Million for the period ending September 30, 2024, and steady profitability over the past few years. The company posted an EBITDA of ₹334.96 Million for FY24, reflecting strong operational efficiency. The profit after tax (PAT) for the same period was ₹241.99 Million.

Investment Insights
Denta Water’s financial metrics indicate a fair valuation, with a pre-issue P/E ratio of 9.45x and a post-issue P/E ratio of 13.14x, well below the industry average of 35x. The company’s Return on Capital Employed (ROCE) for FY24 stands at 76.99%, while the Return on Equity (ROE) is 36.36%, showcasing the strong growth potential of the company.

Recommendation
The IPO offers significant growth prospects, and the potential listing gain of 37.41% makes it an attractive option for investors seeking strong returns. Given the company's solid financials, fair pricing, and positive GMP trends, we recommend applying for the Denta Water and Infra Solutions IPO, especially for those looking for a medium-risk investment opportunity.

IPO Allotment Process
The allotment date for the Denta Water IPO is January 27, 2025. Investors can check their allotment status on the registrar’s website using their application number, PAN, or DP Client ID. After allotment, shares will be listed on BSE and NSE on January 29, 2025.

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