Denta Water Lists at 12% Premium, Shows Strong Momentum on BSE & NSE

resr 5paisa Research Team

Last Updated: 29th January 2025 - 12:23 pm

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Denta Water and Infra Solutions Limited, a water and infrastructure solutions company operating since 2016, marked its entry into the public markets on Wednesday, January 29, 2025. The company, which has established itself in designing, installing, and commissioning water management infrastructure projects with particular expertise in groundwater recharge initiatives, commenced trading on both BSE and NSE with a measured start followed by strong buying interest.

 Denta Water Listing Details

The company's market debut reflected growing investor confidence in its business model and growth prospects:

  • Listing Time & Price: When trading commenced at market open, Denta Water shares debuted at ₹330 on BSE and ₹325 on NSE, delivering premiums of 12.24% and 10.54% respectively to IPO investors. While this opening came below grey market expectations of ₹367, it still validated the market's recognition of the company's specialized water infrastructure capabilities.
  • Issue Price Context: The measured premium emerged after the company had strategically priced its IPO between ₹279 and ₹294 per share, ultimately fixing the final issue price at ₹294. This pricing approach successfully balanced institutional investor accessibility with sustainable valuation metrics.
  • Price Evolution: By 10:59 AM IST, investor enthusiasm built significantly, pushing the stock to ₹341.25, representing a gain of 16.07% over the issue price and hitting the upper circuit, demonstrating strengthening buying interest throughout the early trading session

 

First-Day Trading Performance 

The trading activity showed robust participation and strong investor conviction:

  • Volume and Value: Within the first few hours, 14.44 lakh shares changed hands, generating a substantial turnover of ₹47.91 crore. The strong trading volumes indicated significant investor interest in the company's business model.
  • Demand Dynamics: The stock's trading pattern showed overwhelming buying interest with orders for 9.45 lakh shares with no sellers at current levels, reflecting strong unidirectional interest post circuit filter.

 

Market Sentiment and Analysis

  • Market Reaction: Decent opening followed by strengthening momentum
  • Subscription Rate: The IPO was massively oversubscribed by 221.54 times
  • Pre-listing Interest: Anchor investors demonstrated strong confidence by investing ₹66.15 crore before the public issue

 

Growth Drivers and Challenges

Expected drivers of future performance:

  • Established expertise in water management projects
  • In-house design and engineering capabilities
  • Strong management team
  • Robust order book of ₹752+ crore
  • Track record of timely execution
  • Efficient business model
  • Government initiatives support

 

Potential challenges:

  • Local competition
  • Project execution risks
  • Working capital needs
  • Regulatory changes
  • Geographic concentration

 

Utilisation of IPO Proceeds 

The ₹220.50 crore raised through fresh issue will be used for:

  • Meeting working capital requirements
  • General corporate purposes

 

 Denta Water Financial Performance 

The company has shown strong results:

  • Revenue increased to ₹241.84 crore in FY2024 from ₹175.75 crore in FY2023
  • H1 FY2025 (ended September 2024) showed revenue of ₹98.51 crore with PAT of ₹24.20 crore
  • Net worth of ₹188.46 crore as of September 2024
  • Minimal total borrowings of ₹0.71 crore

 

As Denta Water begins its journey as a listed entity, market participants will closely monitor its ability to execute projects and maintain operational metrics. The measured listing followed by strengthening momentum suggests growing investor confidence in the company's prospects in the water infrastructure sector, particularly given its specialized focus on groundwater recharge projects and strong order book, though competition from local players remains a consideration.
 

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