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Unlisted shares of Denta Water and Infra Solutions Ltd Ltd continue to trade at Rs 444 apiece in the grey market, which is a 51.02 per cent premium over the upper IPO price of Rs 165. It indicates a strong listing gain for investors on…Read More
Denta Water and Infra IPO.
Denta Water and Infra Solutions IPO: The initial public offer of water and infrastructure solutions company Denta Water and Infra Solutions, which was opened on Wednesday, has so far received a whopping response from investors. The IPO was fully subscribed within minutes of its opening. Till 10:14 am on the second day of bidding, the Rs 220.50-crore Denta Water IPO received a 20.96 times subscription, garnering bids for 11,00,54,000 shares as against 52,50,000 shares on offer.
So far, the retail category has been subscribed by 21.16 times subscription, while the NII has got a 46.18 times subscription. The QIB category has been subscribed by 1.7 times.
The IPO will be closed on January 24.
After IPO closes on January 24, its share allotment will be finalised on January 27 and its listing will happen on NSE and NSE on January 29.
Denta Water and Infra Solutions IPO GMP Today
According to market observers, unlisted shares of Denta Water and Infra Solutions Ltd Ltd continue to trade at Rs 444 apiece in the grey market, which is a 51.02 per cent premium over the upper IPO price of Rs 165. It indicates a strong listing gain for investors on January 29.
The GMP is based on market sentiments and keeps changing. ‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Denta Water and Infra Solutions IPO: Should You Apply?
Denta Water and Infra Solutions Ltd (DWISL) specialises in the design, installation, and commissioning of water management projects, with a primary focus on groundwater recharge solutions. Established in 2016 and based in Bangalore, Karnataka, DWISL also undertakes construction projects within the railway and highway sectors, leveraging its expertise to deliver high-quality infrastructure solutions.
The Indian water and wastewater treatment market is expected to grow at a CAGR of 6.20% in terms of value to reach USD 24 billion in 2033 from USD 13 billion in 2023, according to brokerage Geojit Financial.
“Denta’s revenue increased from ₹119.6cr in FY22 to ₹238.6cr in FY24, achieving a CAGR of 41.3%, primarily driven by an increase in revenue from ongoing projects as well as the completion of pending orders during the year. The company’s EBITDA grew from ₹51.8cr in FY22 to ₹79.1cr in FY24 with a CAGR of 23.6%. PAT increased to ₹59.7cr, reflecting a CAGR of 24.8% over the same period,” Geojit said in its IPO note.
Recommending to subscribe to the IPO, Geojit said, “At the upper price band of ₹294, Denta is available at a P/E of 16.2 (FY25 Annualised), which is at a discount compared to its listed peers. The company’s focus on water management projects and growing market opportunities present significant prospects for the company’s future growth. With a robust order pipeline and consistent financial performance featuring industry-leading margins, the company is set for future success. We recommend subscribing to this issue for short- to medium-term investment.”
Another brokerage firm Choice Broking also gave a ‘subscribe’ rating to the IPO. It said DWISL is one of the key players in the field of water EPC with the majority of the projects in the state of Karnataka. It is awarded contracts through a transparent competitive bidding process undertaken by the State and Central governments and also undertakes contracts as sub-contractors from various private parties. As of November 30, 2024, the company has successfully completed 32 projects of water management infrastructure and has 17 ongoing projects.
At the higher price band, DWISL is demanding a P/E multiple of 13.1x, based on its FY24 EPS of Rs. 22.4. This valuation seems to be at a discount compared to its peer average. The company has shown growth in both its top and bottom lines; however, the margins have been impacted. As of November 30, 2024, the company’s order book stands at Rs. 752 crore, which is 3.2x to its FY24 revenue. This reflects revenue visibility for the company in the medium term, it added.
“Going forward, we believe DWISL has strong long-term growth potential, supported by government initiatives in the Water Supply & Management sector and the overall positive outlook for the industry. Thus, we recommend a “SUBSCRIBE” rating for the issue,” Choice said.
Denta Water and Infra Solutions IPO: More Details
The Denta Water and Infra Solutions IPO is entirely a fresh issue of 75 lakh equity shares worth Rs 220.5 crore at the upper end of the price band.
The company on Tuesday said it has raised a little over Rs 66 crore from anchor investors. The issue, with a price band of Rs 279-294 per share, will conclude for public subscription on January 24.
Proceeds to the extent of Rs 150 crore will be utilised for meeting working capital requirements and a portion will be used for general corporate purpose.
Founded in 2016, Denta Water and Infra Solutions Ltd has emerged as one of the key players in the field of water engineering, procurement, and construction (EPC) services.
It has completed 32 water management projects out of which 11 projects were undertaken as the main contractor, 1 project under a consortium/joint venture arrangement and 20 projects undertaken under a sub-contract arrangement with the main contractor.
