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PremiumDenta Water and Infra IPO Day 3 Live Updates: The initial public offering of Denta Water and Infra Solutions achieved a subscription rate of 50.63 times by the second day of bidding on Thursday.
The segment designated for non-institutional investors saw a staggering 128.41 times subscription, while the retail individual investors (RIIs) category was subscribed 43.51 times. The qualified institutional buyers (QIBs) portion received 4.75 times the subscription level.
Denta Water and Infra IPO announced on Tuesday that it had garnered slightly over ₹66 crore from anchor investors. The offering, priced between ₹279 and ₹294 per share, will close for public subscription on Friday.
The initial public offering is a completely new issuance of 7.5 million equity shares valued at ₹220.5 crores at the maximum end of the price range. The funds raised, amounting to ₹150 crores, will be allocated to support working capital needs, while a part will be directed towards general corporate purposes.
Established in 2016, Denta Water and Infra Solutions Ltd has become a significant contender in the domain of water engineering, procurement, and construction (EPC) services.
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The initial public offer of Denta Water IPO has been subscribed 221.68x on the first day of subscription today, at 18:45 IST, as per BSE data.
The initial share sale received bid for 1,16,38,18,100 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 90.56x subscription while the quota for non-institutional investors got subscribed 507.27x. The qualified institutional buyers (QIBs) part is booked 236.94x.
The initial public offer of Denta Water IPO has been subscribed 221.52x on the first day of subscription today, at 18:06 IST, as per BSE data.
The initial share sale received bid for 1,16,29,62,200 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 90.33x subscription while the quota for non-institutional investors got subscribed 507.05x. The qualified institutional buyers (QIBs) part is booked 236.94x.
The initial public offer of Denta Water IPO has been subscribed 221.52x on the first day of subscription today, at 17:15 IST, as per BSE data.
The initial share sale received bid for 1,16,29,62,200 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 90.33x subscription while the quota for non-institutional investors got subscribed 507.05x. The qualified institutional buyers (QIBs) part is booked 236.94x.
The initial public offer of Denta Water IPO has been subscribed 221.35x on the first day of subscription today, at 16:54 IST, as per BSE data.
The initial share sale received bid for 1,16,20,83,650 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 90.04x subscription while the quota for non-institutional investors got subcribed 506.95x. The qualified institutional buyers (QIBs) part is booked 236.94x.
The company has entered into joint agreements to construct many projects. These agreements expose the risk and liabilities of partners’ failure, underperformance, and premature termination could affect the company’s business, operations, and financial condition.
The company reported last three fiscal average EPS and RoNW are ₹27.58 and 45.90, respectively. The issue is priced at a P/BV of 5.01x based on its NAV of ₹85.55 as of March 31, 2024. The company has utilized the capital of the shareholders and generated a 36.36% return (ROE) in the last fiscal. With this, the company has generated a 77% return on capital deployed in the business. The pre-IPO PE ratio is 9.45, based on FY24 earnings, which islower than its peers. Therefore, it is recommended to “Subscribe" to the IPO for long-term investment, and considering its valuation and growth potential.
The initial public offer of Denta Water IPO has been subscribed 220.22x on the first day of subscription today, at 16:15 IST, as per BSE data.
The initial share sale received bid for 1,15,61,60,650 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 88.14x subscription while the quota for non-institutional investors got subscribed 506.12x. The qualified institutional buyers (QIBs) part is booked 236.94x.
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.
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 ₹22.37. We assign a “Subscribe for Long Term" rating for this issue.
The initial public offer of Denta Water IPO has been subscribed 207.07x on the first day of subscription today, at 15:21 IST, as per BSE data.
The initial share sale received bid for 1,08,71,17,400 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 83.74x subscription while the quota for non-institutional investors got subscribed 486.87x. The qualified institutional buyers (QIBs) part is booked 213.04x.
The initial public offer of Denta Water IPO has been subscribed 158.02x on the first day of subscription today, at 14:21 IST, as per BSE data.
The initial share sale received bid for 82,95,95,850 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 76.52x subscription while the quota for non-institutional investors got subscribed 412.12x. The qualified institutional buyers (QIBs) part is booked 110.07x.
The company’s Revenue/EBITDA/PAT achieved CAGR of 41.3%/23.6%/24.8% to ₹239 cr/ ₹79 cr/ ₹60 cr during FY22-FY24 period. The industry forecast indicates healthy growth for the Indian Water and Wastewater treatment market which is projected to expand at a CAGR of 6.2% for the CY24E-CY30E period. We recommend the investors to subscribe the issue.
The company aims to increase geographical diversification of its projects and reduce reliance on particular state, and this will allow them to capitalise on opportunities in water management field, especially in GWR projects.
The company is confident that its strategy of concentrating on growing both its current markets and entering new ones with significant growth potential will allow them to target growth opportunities, broaden their revenue base, and lower the risk of unstable market conditions and price fluctuations brought on by the concentration of resources in a specific geographic area. It intends to expand into other geographies such as Gujarat, Madhya Pradesh, Maharashtra and Uttar Pradesh to unearth additional opportunities beyond the confines of Karnataka.
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.
The initial public offer of Denta Water IPO has been subscribed 121.40x on the first day of subscription today, at 13:18 IST, as per BSE data.
The initial share sale received bid for 63,73,60,800 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 69.93x subscription while the quota for non-institutional investors got subscribed 336.01x. The qualified institutional buyers (QIBs) part is booked 50.53x.
We assign “Subscribe" rating to this IPO as company has established expertise in water management projects with special focus on ground water recharging. Also, it is available at reasonable valuation as compared to its peer.
As of November 2024, the company had 17 ongoing projects with an aggregate contract value of ₹ 1100.4 crore, out of which ₹1,066.7 crore is related to water management (GWR) projects. Of the 17 projects, one project is related to roads, 11 projects is from water management, and 5 projects is from railways.
The initial public offer of Denta Water IPO has been subscribed 88.98x on the first day of subscription today, at 11:48 IST, as per BSE data.
The initial share sale received bid for 46,71,25,600 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 61.48x subscription while the quota for non-institutional investors got subscribed 257.48x. The qualified institutional buyers (QIBs) part is booked 10.71x.
Denta Waters currently has an order book of ₹ 750 crore, which is 3x of the revenue recognized in FY2024. This healthy pipeline of orders serves as a strong foundation for sustained revenue growth in the years ahead.
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.
Over the next five years, the water and wastewater treatment industry in India is expected to grow at a CAGR of 6.2% given the rising urbanization and increasing water scarcity issue in India.
Based on the FY24 earnings relative to the company's post-IPO paid-up equity capital, the issue is priced at a P/E ratio of 13.14x. We believe the company is fairly valued compared to its peers and has strong order book, asset light business model, and improving margins. Therefore, we recommend a “subscribe" rating for the issue.
The initial public offer of Denta Water IPO has been subscribed 61.59x on the first day of subscription today, at 10:18 IST, as per BSE data.
The initial share sale received bid for 32,33,64,550 shares against 52,50,000 shares on offer, according to BSE.
The portion for retail investors received 49.07x subscription while the quota for non-institutional investors got subscribed 166.46x. The qualified institutional buyers (QIBs) part is booked 4.85x.
Their notable achievements encompass pivotal projects like the Byrapura and Hiremagaluru LIS Project, Karagada LIS Project, and others, primarily executed through lift irrigation systems. Notably, Denta Water played a substantial role in the first phase of the KC Valley project, contributing to Bengaluru's reputation as the second-largest city globally in terms of treated wastewater quantity.
As of November 30, 2024, they have 17 ongoing projects being implemented either directly by them or under consortium arrangements with other entities, and their Company’s share in the aggregate contract value comprises ₹ 11,004.36 million, out of which ₹ 10,667.52 million is in relation to water management projects.
Denta Water and Infra Solutions Ltd has established expertise in water management projects with special focus on ground water recharging with expertise in in-house designing and engineering of water management infrastructure projects and strong order book along with efficient business model.
At the upper price band company is valuing at P/E of 13.14x, with an EV/EBITDA of 9.13x and market cap of ₹ 7,849 million post issue of equity shares and return on net worth of 36.36%.
We believe that the IPO is fairly priced and recommend a “Subscribe-Long term" rating to the IPO.
Denta Water IPO GMP today or Denta Water IPO grey market premium is +137. This indicates Denta Water share price was trading at a premium of ₹137 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 ₹431 apiece, which is 46.6% higher than the IPO price of ₹294.
According to the grey market activities observed over the past eight sessions, the IPO GMP is currently showing an upward trend, indicating a potentially strong listing. The minimum GMP recorded is ₹45, whereas the maximum stands at ₹165, as per insights from experts at investorgain.com.
'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.
