The water Management companies are in focus as the country with increasing population can result in depletion in Water resources in the future. Denta Water Limited is set to launch its Initial Public Offering (IPO) which consists of a fresh issue offer of Rs. 220.50 crores. The IPO is done by companies to raise funds for their various corporate purposes and includes expansion and debt repayment. The offer will be conducted through a book-building process and is scheduled to open on January 22, 2025, and close on January 24, 2025, and is expected to be listed on the bourses dated 29th January 2025.
Grey Market Premium
The shares of Denta Water’s price in the grey market were trading at 49.32% as of January 20th, 2024. The shares in Grey Market traded at Rs.439. The premium was Rs. 145 on January 20th, 2024 which was 49.32% over the issue price.
Their Objectives of Offer
The company is raising funds to meet the working capital requirements of Rs. 150 crore. From the total funds, they intend to utilise Rs. 50 crore in FY25 and the remaining Rs. 100 crore in FY26. The remaining funds are to be utlised for general corporate purposes.
About Denta Water (Overview and Business Model)
Denta Water and Infra Solutions was established in 2016. They specialize in water management, EPC services, and groundwater recharging using recycled water. They have completed 32 water management projects and currently manage 17 ongoing projects, with an order book worth Rs. 752.45 crore and 83.98 percent of the order is from the Government of Karnataka.
Their business model focuses on a concept-to-commissioning approach which means they provide design, installation, and maintenance services. The company operates primarily in Karnataka while working on government projects like the Jal Jeevan Mission.
The Financials & Ratios
The company’s revenue from operations stood at Rs. 238.59 crore in FY24, a 36.87% growth from Rs. 174.32 crore in FY23. Net Profits stood at Rs. 59.72 crore in FY24 which is a 19.18% growth from Rs. 50.11 crore in FY23. In September 2024, the company registered a revenue of Rs. 97.78 crore with a net profit of Rs. 24.19 crore.
The return on net worth in FY24 stood at 36.36% which has declined from 47.93% from a year ago. Return on Capital Employed declined from 95.98% in FY23 to 76.99% in FY24.
Denta Water vs. Peers
In RHP, the Company has mentioned its listed peers are VA Tech Wabag Limited and EMS Limited.
Denta Water’s Promoters
The promoters of Denta Water are Sowbhagyamma, Sujith T R, C Mruthyunjaya Swamy, and Hema H M.
The Selling Shareholders in this IPO
As the company is providing fresh issues, there will be no sellers from the existing shareholders as their current stake might be diluted.
Written by Santhosh
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