Denta Water and Infra Solutions Limited has launched its IPO, opening on January 20, 2025, and closing on January 24, 2025. The IPO offers 75 lakh shares at a price band of ₹279 to ₹294 per share, amounting to a total of ₹220.50 crores. The company’s shares are expected to be listed on BSE & NSE on January 29, 2025.

Business Overview

Founded in 2016, Denta Water and Infra Solutions focuses on providing water management and infrastructure solutions. The company specializes in groundwater recharging projects, utilizing recycled water, and provides operation and maintenance services for water treatment plants. Denta Water also participates in railway and highway construction projects, offering a comprehensive and environmentally conscious infrastructure service.

IPO Financial Highlights

• Price Band: ₹279 to ₹294 per equity share
• Market Capitalization: ₹784.98 crores at ₹294 per share
• Lot Size: 50 shares; Minimum Investment for Retail Investors: ₹14,700; HNIs: ₹2,05,800 (14 lots)
• Book Running Lead Manager: SMC Capitals Limited
• Registrar: Integrated Registry Management Services Private Limited

Strong Financial Growth

Denta Water has exhibited steady financial growth with the following key figures:

• Revenue from Operations (₹ Million): FY22 - 1,196.35; FY23 - 1,757.47; FY24 - 2,418.37; Sept 2024 - 985.10
• EBITDA (₹ Million): FY22 - 517.88; FY23 - 683.83; FY24 - 823.76; Sept 2024 - 334.96
• Profit After Tax (PAT) (₹ Million): FY22 - 383.37; FY23 - 501.12; FY24 - 597.25; Sept 2024 - 241.99

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for Denta Water IPO is showing potential listing gains of 44.89%, with an expected listing price of ₹426. While the GMP is a good indicator of market sentiment, it’s important to note that it’s based on unorganized trading and not a definitive reflection of the final listing price.

Subscription and Allotment Details

As of 11:00 AM on January 24, 2025, the IPO has been subscribed a massive 77.84 times, signaling high demand. The IPO allotment date is January 27, 2025, and investors can check their allotment status online by following these steps:

1. Go to the IPO allotment status page.
2. Select Denta Water and Infra Solutions IPO from the dropdown.
3. Enter your application number, PAN, or DP Client ID.
4. Submit to view the allotment status.

IPO Objectives

The company intends to use the IPO proceeds for:

1. ₹150 Crores for working capital requirements.
2. ₹70.50 Crores for general corporate purposes.

Company Strengths

Denta Water is well-positioned in the growing water management and infrastructure industry, specializing in environmentally sustainable projects such as groundwater recharging. The company benefits from a strong track record in operation and maintenance services for water treatment plants, a growing market sector in India.

Valuation and Conclusion

The IPO is attractively priced with a pre-issue P/E ratio of 9.45x and a post-issue P/E ratio of 13.14x, which is favorable when compared to the industry P/E of 35x. The company’s ROCE of 76.99% and ROE of 36.36% for FY24 indicate excellent return potential for investors.

Given the solid financial performance, strong GMP potential, and fair pricing, Denta Water IPO presents a promising investment opportunity, particularly for those seeking potential listing gains.

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