Denta Water and Infra Solutions Limited

Denta Water and Infra Solutions’ IPO will open on January 22, 2025, and close on January 24, 2025. This IPO is a Book Built Issue, with the company aiming to raise approximately ₹220.50 crores through a fresh issue of ₹220.50 crores and an offer for sale of up to [.] equity shares, each having a face value of ₹10.

The price range for the Denta Water IPO is set between ₹279 and ₹294 per share. The allocation for retail investors is 35%, while Qualified Institutional Buyers (QIB) have 50%, and High Net-worth Individuals (HNI) receive 15%. Denta Water is set to be listed on the BSE and NSE on January 29, 2025, with the allotment date scheduled for January 27, 2025.

The company reported revenues of ₹241.84 crores in 2024, compared to ₹175.75 crores in 2023, and a profit of ₹59.73 crores in 2024, up from ₹50.11 crores in 2023. Based on these financials, it is suggested that IPO investors consider applying for the IPO with a long-term perspective.

Key Details:

• Key Details:
• IPO Dates:
  • Open Date: January 22, 2025  
  • Close Date: January 24, 2025  
• Price Band: ₹279 – ₹294 per share  
• Issue Size: ₹220.50 Crores (Fresh Issue)  
• Face Value: ₹10 per share  
• Lot Size: 50 shares  
• Listing Date: January 29, 2025 (Expected)  
• Lead Managers: Smc Capitals Limited
• Registrar: Integrated Registry Management Services Private Limited

Timeline

IPO Open Date:	January 22, 2025
IPO Close Date:	January 24, 2025
Basis of Allotment:	January 27, 2025
Refunds:	January 28, 2025
Credit to Demat Account:	January 28, 2025
IPO Listing Date:	January 29, 2025

About Denta Water and Infra Solutions Limited IPO

Core Business:

• Specializes in the execution of water and wastewater infrastructure projects.  
• Key services include:
  • Design, engineering, and construction of water supply and distribution systems.  
  • Sewage treatment plants (STPs)
  • Effluent treatment plants (ETPs)
  • Groundwater recharge systems  
  • Rainwater harvesting systems

Market Position:

• Focuses on both government and private sector projects across various regions in India.
• Likely to have a regional or niche market focus within the broader water and wastewater infrastructure sector.

Future Outlook:

• The Indian government is prioritizing water and sanitation infrastructure development, creating significant growth opportunities for companies like Denta Water and Infra Solutions.  
• Increasing focus on water conservation and pollution control will drive demand for the company’s services.
• Opportunities for expansion into new geographies and diversification into related areas like renewable energy (solar, wind) for water treatment are possible.

Objective

The primary objectives of the Denta Water and Infra Solutions Limited IPO are likely to be:

• Funding Growth:
  • The primary objective is to raise capital to finance the company’s growth initiatives.
  • This includes expanding its operations into new geographies, acquiring new projects, and investing in new technologies and equipment to improve efficiency and enhance service offerings.
• Repaying Debt:
  • A portion of the proceeds may be used to repay existing debt obligations, thereby improving the company’s financial leverage and reducing interest expenses.
• General Corporate Purposes:
  • The funds will also be used for general corporate purposes such as strengthening working capital, meeting operational expenses, and supporting other general business requirements.

By achieving these objectives, Denta Water and Infra Solutions Limited aims to strengthen its financial position, expand its market share, and enhance its long-term growth prospects.

Denta Water & Infra Solutions: Weighing the Pros and Cons

POSITIVE

• Growth Potential: The Indian government is prioritizing water and sanitation infrastructure development, creating significant growth opportunities for the company.  
• Focus on Essential Services: The company operates in a sector that provides essential services, which is generally less cyclical and less susceptible to economic downturns.
• Government Support: Government initiatives and policies aimed at improving water and sanitation infrastructure will likely benefit the company.  

Negatives

• Competition: The water and wastewater infrastructure sector is competitive, with both established players and new entrants. 
• Execution Risks: Project execution can be challenging and subject to delays, cost overruns, and regulatory hurdles.
• Government Regulations: Changes in government regulations or policies related to water and sanitation can impact the company’s operations.
• Financial Performance: The company’s financial performance will depend on factors such as project execution, contract wins, and raw material costs, which can fluctuate.  

So,How Does Denta Water and Infra Solutions Limited IPO Fare in Terms of Financials ?

Financial Review of Denta Water and Infra Solutions Limited IPO

Period Ended	Assets	Revenue	Profit After Tax	Net Worth	Reserves and Surplus	Total Borrowing
30 Sep 2024	220.35	98.51	24.25	188.46	169.26	0.71
31 Mar 2024	219.85	241.84	9.73	164.26	145.06	0.86
31 Mar 2023	123.28	175.75	50.11	104.55	99.74	1.15
31 Mar 2022	60.64	119.64	38.34	54.43	49.63	0

(₹ Crore)

Key Observations:

• Revenue Growth: Significant revenue growth from FY22 to FY23, followed by a decline in Q2 FY25. This could indicate seasonality in project execution or potential challenges in securing new contracts.
• Profitability: Profitability has fluctuated, with a significant increase in FY23 followed by a decline in FY24 and Q2 FY25. This could be attributed to factors such as project margins, input costs, and competition.
• Asset Growth: Steady growth in assets over the years, reflecting investments in projects and expansion of operations.
• Net Worth Growth: Consistent growth in net worth, indicating a healthy financial position.
• Low Debt: The company has maintained a low debt level, which is a positive sign for financial stability.

Denta Water and Infra Solutions Limited IPO Valuation :

KPI	Values
ROE:	36.36%
ROCE:	76.99%
EBITDA Margin:	33.17%
PAT Margin:	25.03%
Debt to equity ratio:	0.01
Earning Per Share (EPS):	₹31.11 (Basic)
Price/Earning P/E Ratio:	N/A
Return on Net Worth (RoNW):	36.36%
Net Asset Value (NAV):	₹85.55

SWOT Analysis of Denta Water and Infra Solutions Limited

Strengths

• Focus on Essential Services: Operates in a sector providing essential services (water and wastewater infrastructure), which has stable and consistent demand.
• Government Focus: Benefits from government initiatives and policies prioritizing water and sanitation infrastructure development.
• Project Execution Experience: Likely possesses expertise in project execution, including design, engineering, and construction.

Weaknesses

• Competition: Faces competition from established players in the water and wastewater infrastructure sector.
• Project Execution Risks: Subject to project delays, cost overruns, and regulatory hurdles.
• Dependence on Government Contracts: May have significant reliance on government contracts, which can be subject to budgetary constraints and policy changes.

Opportunities

• Expansion into New Geographies: Expanding operations to new regions with growing demand for water and sanitation infrastructure.
• Diversification: Diversifying into related areas such as renewable energy for water treatment, desalination, or water management solutions.
• Technology Adoption: Adopting new technologies such as IoT, AI, and automation to improve efficiency and reduce costs.

Threats

• Economic Slowdown: Economic downturns can impact government spending and private sector investment in infrastructure projects.
• Natural Disasters: Natural disasters can disrupt operations and cause damage to infrastructure projects.
• Regulatory Changes: Changes in government regulations or policies related to water and sanitation can impact the company’s operations.

Competitive Analysis:Denta Water and Infra Solutions IPO

Denta Water and Infra Solutions Limited operates in a competitive market with several key players. Some of the major competitors include:

• Larsen & Toubro (L&T): A large conglomerate with a strong presence in infrastructure, including water and wastewater treatment.
• Tata Projects: Another major player in the Indian infrastructure sector with expertise in water and environmental engineering.
• Shapoorji Pallonji: A diversified conglomerate with a significant presence in infrastructure projects, including water and wastewater treatment.
• Va Tech Wabag: A global player specializing in water technology and environmental engineering.
• Atul Auto: A diversified company with a presence in the water and wastewater treatment sector.

Denta Water and Infra Solutions Limited IPO GMP

• Grey market premium as on 22-01-2025 = ₹ /Share

Disclaimer:

• IPO Grey Market Premium (Denta Water and Infra Solutions Limited IPO GMP) mention is valid for the specific date as mentioned in the header.
• We are not buying and selling IPO forms on IPO Grey Market.
• Don’t decide to subscribe to an IPO just based on the initial price, as it can change before the listing.Subscribe only considering Fundamentals of the companies.

Denta Water and Infra Solutions IPO

🔴 Live Subscription Status 🔴

22/01/2025 10:00 AM

	NO OF SHARES OFFERED	Day 1	Day 2	Day 3
Qualified Institutional Buyers(QIBs)
Non Institutional Investors(NIIs)
Retail Individual Investors(RIIs)
Employees
Total

FINAL TAKEAWAY

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