Denta Water IPO – Introduction
Denta Water and Infra Solutions Limited, a growing name in the water management and infrastructure sector, is set to launch its Initial Public Offering (IPO) from January 22, 2025, to January 24, 2025. With a total issue size of ₹220.50 crore, this IPO offers investors an opportunity to participate in a sector addressing critical water infrastructure challenges in India. This article reviews and provides Denta Water IPO issue details, about the company, reasons to invest, buy or not, risk factors, final conclusion whether it is good or bad for investment.
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About the Company
Incorporated in 2016, Denta Water and Infra Solutions Limited specializes in designing, installing, and managing water infrastructure projects. The company focuses on groundwater recharge and other water management initiatives, contributing significantly to environmental sustainability. With 32 successfully executed projects, including the KC Valley and Byrapura projects, Denta Water has established itself as a reliable partner in infrastructure development. The company also generates diversified income from its 98-acre coffee plantation and a beach resort in Karnataka.
Competitive Strengths of Denta Water and Infras Solutions Ltd
- Expertise in groundwater recharge and water infrastructure.
- Proven track record in timely project execution.
- Diversified revenue streams from agricultural and hospitality ventures.
Denta Water IPO – Issue Details
- IPO Date: January 22, 2025 – January 24, 2025
- Issue Size: ₹220.50 crore
- Price Band: ₹279 to ₹294 per share
- Lot Size: 50 shares
- Total Shares: 75,00,000 (entirely fresh issue)
- Listing: BSE and NSE
- Minimum Investment: ₹14,700 (retail category, 50 shares)
- Lead Manager: SMC Capitals Limited
Financials of the company
Below are the key financial metrics. Amounts in ₹ Crores.
Particulars |
30 Sep 2024 (H1) | FY 2024 | FY 2023 | FY 2022 |
---|---|---|---|---|
Revenue (₹ Cr) | 98.51 | 241.84 | 175.75 | 119.64 |
PAT (₹ Cr) | 24.2 | 59.73 | 50.11 | 38.34 |
Net Worth (₹ Cr) | 188.46 | 164.26 | 104.55 | 54.43 |
Debt/Equity | 0.01 | 0.01 | 0.01 | – |
The company has demonstrated strong growth with a compounded annual growth rate (CAGR) of over 25% in revenue and profits over the last three years. Its low debt-to-equity ratio is a positive indicator of financial stability.
Objects of the IPO
The Denta Water Infra IPO Size is ₹ 220.5 Crores which is totally fresh issue and company plans to utilize the proceeds as follows:
- To meet working capital requirements.
- General corporate purposes.
Denta Water IPO – P/E Ratio and Peer Comparison
- Based on FY24 EPS of ₹ 31.11 and higher IPO price band of ₹ 294, P/E ratio works out to be 9.45x (Pre-IPO)
- If we annualise H1 FY25 EPS, P/E ratio works out to be 11x (Pre-IPO).
- Post IPO the P/E works out to be 16.2x for FY24.
- Its competitors like VA Tech Waba is trading at P/E of 384x (Highest) and EMS Ltd trading at P/E 27.4x (Lowest) and industry average P/E is at 32.9x. Hence Denta Water IPO Price is attractively priced.
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Denta Water IPO – Reasons to Invest
- Growth Potential: India’s water infrastructure sector is poised for exponential growth due to increasing urbanization and government initiatives like the Jal Jeevan Mission.
- Strong Financials: Consistent revenue growth, robust profit margins, and low debt-to-equity ratio.
- Reputed Projects: Execution of landmark projects showcases technical and managerial expertise.
- Sustainability Focus: Commitment to groundwater recharge and recycled water use aligns with global environmental trends.
Risk Factors in this IPO
- Dependency on Government Contracts: A significant portion of revenue comes from government projects, which may face delays or cancellations.
- Geographic Concentration: The company’s operations are heavily focused in Karnataka.
- New Market Risks: As this is the company’s maiden public issue, price volatility is expected post-listing.
- Other Risk Factors: IPO investors should consider all risk factors indicated in Denta Water IPO RHP (Prospectus)
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Denta Water IPO Grey Market Price (GMP)
As of January 17, 2025, the GMP for Denta Water IPO stands at ₹28 per share, indicating a premium over the higher price band of ₹294. Means, Denta Water IPO Expected listing price could be around ₹ 332 if we consider only GMP into consideration. This reflects moderate market interest.
Denta Water and Infra Solutions IPO Dates
IPO Open Date | Wednesday, January 22, 2025 |
IPO Close Date | Friday, January 24, 2025 |
Basis of Allotment | Monday, January 27, 2025 |
Initiation of Refunds | Tuesday, January 28, 2025 |
Credit of Shares to Demat | Tuesday, January 28, 2025 |
Listing Date | Wednesday, January 29, 2025 |
Cut-off time for UPI mandate confirmation | 5 PM on January 24, 2025 |
How to Buy Denta Water IPO?
Investors can apply for Denta Water IPO via:
- ASBA (Application Supported by Blocked Amount): Through bank net banking.
- UPI Mechanism: Through supported mobile apps like BHIM, Google Pay, and PhonePe.
Denta Water IPO – Invest or Avoid?
Denta Water and Infra Solutions IPO offers a mix of strong fundamentals, growth potential, and industry relevance. However, risks like dependency on government contracts and geographic concentration should be considered.
Long-term investors seeking exposure to the water infrastructure sector may subscribe to this IPO for its growth story and sustainability focus. Short-term investors should monitor the GMP and market conditions before making a decision.
Disclaimer: The above article is for educational purposes only and should not be considered as investment advice. Please consult a financial advisor before making any investment decisions.
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