Denta Water and Infra Solutions Limited, a growing company in the water and infrastructure sector, has launched its IPO, aiming to raise ₹220.50 Crores through the issue of 75 Lakh shares. Established in 2016, Denta Water focuses on designing, installing, and commissioning groundwater recharging and water treatment projects. The IPO, priced between ₹279 and ₹294 per share, has drawn considerable attention, with strong initial subscription figures.

IPO Price and Subscription Details The Denta Water IPO opened for subscription on January 20, 2025, and is set to close on January 24, 2025. The IPO price range is ₹279 to ₹294 per equity share, with a market capitalization of ₹784.98 Crores at the upper price band. The company has witnessed a substantial subscription rate of 16.95 times on the first day. This indicates strong demand from investors, reflecting the market’s confidence in the company’s potential.

Retail investors are required to invest a minimum of ₹14,700, while High Net-Worth Individuals (HNIs) need to invest ₹2,05,800 for a minimum of 14 lots (700 shares). The lot size for the IPO is 50 shares. As the IPO progresses, many are looking to the grey market premium (GMP) as an indicator of the expected listing price. As of January 22, 2025, the GMP for the Denta Water IPO stands at ₹132, indicating a potential 44.89% gain on the listing day.

IPO Allotment and Listing Date Denta Water IPO allotment will be finalized on or about January 27, 2025, and shares are expected to list on the BSE & NSE on January 29, 2025. Investors can check their allotment status by visiting the registrar’s website. A simple procedure allows applicants to enter their application number or PAN details to track their IPO status.

Financial Performance and Valuation Denta Water has shown strong financial growth in recent years, with its revenue increasing from ₹1,196.35 Million in FY 2022 to ₹2,418.37 Million in FY 2023. The company’s profit after tax (PAT) has also seen significant growth, reflecting a solid track record in delivering sustainable business outcomes. The pre-issue P/E ratio stands at 9.45x, considerably lower than the industry average of 35x, suggesting that the IPO is priced attractively.

For FY24, the company’s ROCE (return on capital employed) is 76.99%, and the ROE (return on equity) stands at 36.36%. These metrics suggest robust profitability and efficient use of capital, reinforcing the case for investing in the IPO.

Grey Market Premium and Market Outlook The Grey Market Premium is an informal indicator, with the current figure of ₹132 representing a 44.89% premium over the IPO’s price of ₹294 per share. The trend of rising GMP indicates a high likelihood of strong listing gains, further fueling investor interest. However, it is important to note that grey market trading is unregulated, and investors should rely on official channels for pricing information.

Investment Recommendation Based on the company’s solid financial performance, attractive P/E ratio, and significant subscription demand, we recommend applying for the Denta Water IPO. The GMP trend and the company’s operational focus on environmentally sustainable water management projects make it a potentially profitable investment in the coming years.

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