Denta Water and Infra Solutions IPO allotment status strengths & risks
Founded in 2016 and based in Bengaluru, Denta Water and Infra Solutions has established itself as a dynamic player in water and infrastructure solutions. The company specializes in the design, installation, and commissioning of water management projects, particularly in groundwater recharge.
Denta is a leading civil engineering contractor specializing in the crucial areas of water revitalization and groundwater recharging. With a focus on technical excellence and a set of strong core values, Denta has built a solid reputation by consistently delivering high-quality solutions through a talented and dedicated workforce.
The company is adept at executing projects aimed at revitalizing water sources and recharging groundwater. Their expertise spans across various sectors, highlighting a commitment to the restoration and conservation of this vital resource.
Core Services
1. Water Infrastructure Management: Denta provides comprehensive solutions for managing water infrastructure in diverse environments.
2. Groundwater Recharging: The company develops innovative strategies to recharge aquifers, promoting long-term sustainability of water resources.
Denta is an expanding water and infrastructure solutions provider that focuses on the design, installation, and commissioning of water management projects, particularly in groundwater recharging. They also offer operations and maintenance services for water management infrastructure over specific contractual periods. Furthermore, Denta takes on construction projects related to railways and highways. Notably, Denta is among the few companies in India with extensive experience in the design, installation, commissioning, operations, and maintenance of groundwater recharging systems using recycled water.
Denta Water and Infra IPO Update
Denta Water and Infra Solutions IPO allotment status
As the final day of bidding for Denta Water and Infra Solutions approaches, the initial public offering (IPO) is witnessing an enthusiastic response from investors. The offering was oversubscribed over 17 times on the first day and saw an impressive climb to nearly 51 times by the end of the second day.
Denta Water and Infra Solutions is offering shares within a price range of Rs 279-294 each. Investors can apply for a minimum of 50 shares, with additional bids in multiples. The IPO represents a fresh share sale of up to 7.5 million equity shares, totaling Rs 220.50 crore.
As of 2:25 PM on Thursday, January 9, 2025, bids had poured in for 83,15,86,750 equity shares—158.40 times the 52,50,000 shares available for subscription. This three-day bidding process began on Wednesday, January 22, and wraps up today.
Non-institutional investors (NIIs) showed exceptional interest, with subscriptions hitting 413.16 times. Meanwhile, retail investor allocations were filled 76.68 times, and qualified institutional bidders (QIBs) saw an impressive subscription rate of 110.33 times.
In the grey market, Denta Water and Infra Solutions has experienced some fluctuations amid broader market volatility. Currently, shares command a premium of Rs 120-125 in the unofficial market, indicating a possible listing gain of approximately 40-42%. Previously, the premium was noted at Rs 165 before the bidding commenced.
Overall, brokerages are largely optimistic about this IPO, advising investors to consider subscribing due to the company’s strong financial performance, recent contract acquisitions, and growing demand for water treatment solutions. However, potential investors should keep in mind the risks associated with reliance on government projects, joint ventures, political uncertainties, and competitive pressures.
SBI Securities projects a FY24 P/E and EV/EBITDA ratio of 13.1 times and 9.81 times, respectively, making use of the upper range of the post-issue capital. The company has reported a compound annual growth rate (CAGR) of 41.3%, 23.6%, and 24.8% in revenue, EBITDA, and PAT, respectively, achieving figures of Rs 239 crore, Rs 79 crore, and Rs 60 crore in the fiscal years spanning FY22 to FY24.
Denta Water and Infra Solutions IPO allotment status
The outlook for the Indian Water and Wastewater treatment sector shows promising growth, with projections indicating a compound annual growth rate (CAGR) of 6.2% from calendar year 2024 to 2030. Investors are encouraged to consider participating in this opportunity.
In recent developments, Quadrant Future Tek successfully raised ₹66.15 crore through an anchor book from 10 institutional investors, allocating 22.5 lakh equity shares at ₹294 each. Additionally, Denta Water and Infra Solutions reported a net loss of ₹24.2 crore on revenues of ₹98.51 crore for the six months ending September 30, 2024.
The company has set aside 50% of the net issue for qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will be allocated 15%. The remaining 35% of the net issue will be available for retail investors, positioning the company with a projected market capitalization nearing ₹785 crore.
SBI Securities evaluates the company based on a FY24 P/E ratio and EV/EBITDA multiple of 13.1x and 9.81x, respectively, following the upper price band of the post-issue capital. Over the period from FY22 to FY24, the company has achieved impressive CAGRs across its revenue, EBITDA, and PAT, with increases of 41.3%, 23.6%, and 24.8%, reaching ₹239 crore, ₹79 crore, and ₹60 crore, respectively.
Strengths:
- Specialized knowledge in groundwater recharging and water management initiatives.
- So far Successfully completed 32 projects for the Government of Karnataka.
- Equipped with an in-house team for design, engineering, and project management.
- Developed strong client relationships, particularly with the Karnataka Government.
- Engages in projects via joint ventures and sub-contract agreements.
- Operates under an asset-light business model.
Risks:
- Dependency on government contracts, especially from Karnataka.
- Potential for delays or early termination of government contracts.
- Difficulties in managing expansion into new regions across Northern and Southern India.
- Subject to regulatory scrutiny and potential delays in receiving payments from government contracts.
- Bank guarantees impose restrictive covenants that could limit business flexibility.
- Previous legal proceedings and investigations related to the promoter.
- Ongoing complaints with SEBI involving allegations against the promoter and the company.
Denta Water and Infra Solutions IPO allotment status
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Denta Water and Infra Solutions IPO allotment status Check Here:
https://www.nseindia.com/invest/check-trades-bids-verify-ipo-bids
What are the most anticipated IPOs in 2025:
https://visionarydaily.in/what-are-the-most-anticipated-ipos-in-2025/
