Denta Water and Infra IPO Day 1 Live Updates: The public offering for Denta Water and Infra Solutions Ltd, a company focused on water and infrastructure solutions, will begin on Wednesday, January 22, and end on Friday, January 24. On Tuesday, Denta Water and Infra Solutions announced that it has secured slightly more than ₹66 crore from anchor investors prior to its IPO. The IPO consists entirely of a fresh issuance of 75 lakh equity shares, totaling ₹220.5 crore at the highest end of the price band.
The fresh issuance proceeds amounting to ₹150 crore will be allocated for working capital needs, with a portion designated for general corporate activities.
SMC Capitals serves as the exclusive book-running lead manager for the issue.
Since its establishment in 2016, Denta Water and Infra Solutions Ltd has become a significant player in the water engineering, procurement, and construction (EPC) sector.
The company has successfully completed 32 water management projects, including 11 as the primary contractor, one through a consortium/joint venture arrangement, and 20 as a subcontractor in collaboration with the main contractor.
Stay tuned for more updates
Denta Water and Infra IPO Day 1 Live Updates: Check out key risks
- Joint ventures: The company is required to enter joint ventures to bid for some of the projects (especially larger size). Failure on the part of partner might lead to cost escalation, and assuming of complete responsibility of the project.
- Revenue from Top 1 customer: In FY24, the company derived 32.0% of its revenue from the top customer. Failure to retain the customers and/or execute orders in favorable conditions could result in financial loses.
Denta Water and Infra IPO Day 1 Live Updates: All you need to know about the company
Incorporated in 2016, Denta Water and Infra Solutions Limited is a growing water and infrastructure solutions company engaged in designing, installing, and commissioning water management infrastructure projects with expertise in groundwater recharge projects. The company has experience in water engineering and EPC services, the company specializes in infrastructure projects, including groundwater recharging through recycled water, addressing growing water solution demands.
Denta Water and Infra IPO Day 1 Live Updates: Issue booked 8.94x so far
The initial public offer of Denta Water IPO has been subscribed 8.94x on the first day of subscription today, at 13:21 IST, as per BSE data.
The initial share sale received bid for 4,69,31,450 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 10.35x subscription while the quota for non-institutional investors got subscribed 15.49x. The qualified institutional buyers (QIBs) part is booked 1.56x.
Denta Water and Infra IPO Day 1 Live Updates: Check out investment rationale by experts
- Established expertise in water management projects
- In-house expertise in designing and engineering of water management infrastructure projects
- Strong Order Book
Denta Water and Infra IPO Day 1 Live Updates: Check out Arihant Capital’s views
The company is focused on infrastructure development space and expansion into other geographies for reuse of discharge water. At the upper band of INR 294, the issue is valued at an EV/EBITDA of 9.1x based on FY24 EBITDA and P/E of 13.14x, based on FY24 EPS of INR 22.37. We assign a “Subscribe for Long Term” rating for this issue.
Denta Water and Infra IPO Day 1 Live Updates: Check out firm’s key strengths
- Established expertise in water management projects with special focus on ground water recharging.
- In-house expertise in designing and engineering of water management infrastructure projects.
- Strong order book and efficient business model.
Denta Water and Infra IPO Day 1 Live Updates: Issue booked 5.62x so far
The initial public offer of Denta Water IPO has been subscribed 5.62x on the first day of subscription today, at 11:48 IST, as per BSE data.
The initial share sale received bid for 2,94,95,800 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 6.49x subscription while the quota for non-institutional investors got subscribed 9.02x. The qualified institutional buyers (QIBs) part is booked 1.55x.
Denta Water and Infra IPO Day 1 Live Updates: Check out some key risks
- High dependence on govt. projects: Contribution to revenue from government projects has increased from 23.8% in FY22 to 63.4% in FY24. This increasing dependence, particularly on Government of Karnataka could affect revenues from operations if there are any changes in policies, budgetary allocation, change in the government or unfavorable terms and conditions.
- KMP attrition: The company is witnessing high Key Managerial Person attrition. Two CFOs and one director resigned in last one year. Failure to retain KMP including directors could result in decreasing efficiency. Furthermore, the company might be required to increase compensation to the employees thereby straining the financials.
Denta Water and Infra IPO Day 1 Live Updates: Strong order book
As on November 30, 2024, 17 projects are ongoing, and the order book value stands at ₹7,524.51mn. The unexecuted orders offer revenue visibility of over 2 years. In general, the average execution period for Ground Water Recharge (GWR) projects varies from 24-36 months. The company is currently focusing on the state of Karnataka and accordingly all its projects are concentrated in Karnataka. The company’s proven execution capabilities in executing GWR projects is expected to lead to new order wins and growth.
Denta Water and Infra IPO Day 1 Live Updates: All you need to know about Asset-light business model
The company has embraced an asset-light business model while acquiring critical equipment necessary for the construction activities of the projects it undertakes. The emphasis is on development management and entering into joint development agreements or joint ventures, which necessitates a lower initial capital investment compared to a direct approach. This asset-light model enables them to maintain low capital requirements, thereby helping to decrease equipment maintenance costs. Typically, they delegate a portion of the work to subcontractors who supply both manpower and equipment support.
Denta Water and Infra IPO Day 1 Live Updates: Check out Indsec Securities views
In India, Water and Wastewater Treatment market is expected to grow at a CAGR of 6.2% by 2033 led by CAGR of 6.24% in southern India. The company derives over 87% of its revenue from water management while rest are derived from irrigation, Roads and Miscellaneous segment. Its asset light model for purchase of equipment helps it sustain healthy asset turnover and maintain decent profitability.
Company attracts a healthy EBITDA margin of 33-43% which is one of the highest in the industry. As is the case with EPC companies, second half of financial year are strong for these companies. We thereby assign “Subscribe” rating to the IPO.
Denta Water and Infra IPO Day 1 Live Updates: Issue booked 52% so far
The initial public offer of Denta Water IPO has been subscribed 52% on the first day of subscription today, at 10:12 IST, as per BSE data.
The initial share sale received bid for 27,05,050 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 68% subscription while the quota for non-institutional investors got subscribed 83%. The qualified institutional buyers (QIBs) part is yet to be booked.
Denta Water and Infra IPO Day 1 Live Updates: Promoter and promoter group
The Promoters of the company are Sowbhagyamma, Sujith T R, C Mruthyunjaya Swamy and Hema H M.
Denta Water and Infra IPO Day 1 Live Updates: Check out key strategies of the firm
- Leverage core competencies in execution of water management projects.
- Expansion into other geographies for reuse of discharge water.
Denta Water and Infra IPO Day 1 Live Updates: Here’s what Geojit Financial Services says about the issue
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.
Denta Water and Infra IPO Day 1 Live Updates: All you need to know about order book
Denta Water has an order book valued at ₹784.2cr as of the end of 2024. With a 3.2x order book to sales ratio for FY24, there will be a solid medium-term revenue visibility. In FY24, Denta’s ROE and EBITDA margin were both higher than those of its competitors, at 36.3% and 33%, respectively. In FY24, the debt-to-equity ratio was 0.01x, indicating sound financial standing.
Denta Water and Infra IPO Day 1 Live Updates: All you need to know about anchor details
Denta Water and Infra Solutions Ltd secured slightly more than ₹66 crore from anchor investors prior to its initial public offering (IPO). Among the participants in the anchor round were both foreign and domestic institutions, including Abakkus Diversified Alpha Fund-2, Rajasthan Global Securities, Saint Capital Fund, Finavenue Capital Trust, Chhatisgarh Investments Ltd, Steptrade Revolution Fund, Astorne Capital VCC — Arven, and Aarth AIF, as indicated in a circular posted on the BSE’s website.
According to the circular, the company allocated 22.5 lakh equity shares at a price of ₹294 each to 10 funds, resulting in a total transaction value of ₹66.15 crore.
Denta Water and Infra IPO Day 1 Live Updates: Here’s what GMP hints ahead of the launch
Denta Water IPO GMP today or Denta Water IPO grey market premium is +165. This indicates Denta Water share price was trading at a premium of ₹165 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Denta Water share price was indicated at ₹459 apiece, which is 56.12% higher than the IPO price of ₹294.
Today’s IPO GMP is positive and anticipates a solid listing based on the grey market activity over the last six sessions. Experts from investorgain.com say that the lowest GMP is ₹45 and the highest is ₹165.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
