Denta Water and Infra IPO day 3: GMP, subscription status to review. Should you apply as bidding ends today?

Denta Water and Infra IPO: The initial public offering (IPO) of Denta Water and Infra Solutions Limited hit the Indian primary market on 22 January 2025 and will remain open for bidding until 5:00 PM on 24 January 2025. This means investors have just one day to apply for the public issue worth ₹220.50 crore. The water and infrastructure solutions company has announced the Denta Water and Infra IPO price band at ₹279 to ₹294 per equity share. Meanwhile, after strong Denta Water and Infra IPO subscription status, company shares are trading at a substantial premium in the grey market. According to stock market observers, Denta Water and Infra Limited shares are available at a premium of ₹151 in the grey market today.

Denta Water and Infra IPO GMP today

As mentioned, Denta Water and Infra IPO GMP (Grey Market Premium) today is ₹151, ₹15 lower than Thursday's GMP of ₹166. Market experts said that a cautious secondary market mood could be a reason for some dip in grey market sentiments. However, strong Denta Water and Infra IPO subscription status has enabled the public issue to maintain its positive buzz in the grey market, which is praiseworthy.

Denta Water and Infra IPO subscription status

By 4:00 PM on day 3 of bidding, the public issue had been subscribed 219.71 times, the retail portion 87.34 times, the NII segment 505.62 times, and the QIB portion 236.94 times.

Denta Water and Infra IPO review

Assigning an 'apply' tag to the book build issue, Adroit Financial Services says, "The consolidated revenue grew with a CAGR of over 41% from ₹119.57 cr to ₹238.6 cr between FY 2022- 24 led by GWR projects in water management and FY 2024, the company's top line significantly rose by 36.87%. The operating profit grew by 18.19% to ₹79.14 cr in the last fiscal year compared with the same period a year ago. The operating margin tumbled by 524 bps in the same period, 33.17% / 38.41% in FY24/FY23. The company's net profit surged by 19.18% to ₹59.73 cr, but the net profit margin declined by 372 bps in the last fiscal year vs. a year ago. As of Sep 2024, the company has unbilled revenue ₹44.93 cr, which means the projects were completed, but the invoice was not raised."

"The company reported that the 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. The pre-IPOPE ratio is 9.45, based on FY24 earnings, which is lower than its peers. Therefore, it is recommended to "Subscribe" to the IPO for long-term investment, and considering its valuation and growth potential," Adroit Financial Services added.

Geojit Securities also assigned a 'subscribe' tag to the public issue, saying, "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. The company is set for future success with a robust order pipeline and consistent financial performance featuring industry-leading margins. We recommend subscribing to this issue for short- to medium-term investment."

In addition to these, Anand Rathi, Arihant Capital Markets, BP Equities, GEPL Capital, INDSEC Securities, Marwadi Shares and Finance, SBI Capital Securities, SMIFS, and Ventura Securities have also assigned a 'subscribe' tag to the public issue.

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.