Wednesday, December 13, 2023

Bengaluru-based Denta Water and Infra Solutions Limited files draft papers for IPO

Bengaluru-based Denta Water and Infra Solutions Limited, a seasoned player in the field of water engineering, procurement, and construction (EPC) services, has filed its Draft Red Herring Prospectus (DRHP) with capital market regulator Sebi to raise funds for its initial public offering (IPO).
The IPO, with a face value of Rs 10, is entirely a fresh issue of up to 7.5 million equity shares with no offer for sale (OFS) component. 
The issue is being made through the book-building process, wherein not more than 50% of the issue shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the issue shall be available for allocation to non-institutional bidders, and not more than 35% of the issue shall be available for allocation to retail individual bidders.
The company, in consultation with the lead bankers to the issue, may consider a further issue of equity shares on a private placement, rights issue, preferential issue, or any other method aggregating up to 1.1 million equity shares (“Pre-IPO Placement”). If such placement is completed, the fresh issue size will be reduced.
The proceeds from the fresh issue, to the extent of Rs 150 crore, will be used to meet working capital requirements.
Denta Water and Infra Solutions Limited were established in 2016 and have a commendable track record in infrastructure project installations, including groundwater recharging through recycled water. Denta Water has been a key contributor to addressing the rising demand for water-related solutions in the country.
As per the DRHP, the company's water management projects are concentrated in the state of Karnataka. It has completed 16 water management projects (as main contractors and sub-contractors) and is presently undertaking 19 water management projects that are in various stages of implementation.
The company was awarded contracts through a transparent, competitive bidding process undertaken by the state and central governments. Further, it also undertakes contracts as sub-contractors from various private parties. As of October 31, 2023, it has procured direct contracts (as a consortium partner) worth Rs 541.86 crore, direct contracts (independent) worth Rs 32.18 crore, and sub-contracts worth Rs 402.65 crore in GWR projects.
It participates in tenders for developing projects such as infrastructure for groundwater recharging, lift irrigation, and infrastructure for supplying drinking water to various habitations under the “Jal Jeevan Mission” on a competitive basis. In addition, it has also undertaken construction projects in the fields of railways and highways. It is one of the few companies in India with experience and expertise in the design, installation, commissioning, operations, and maintenance of groundwater recharging using recycled water.
Under the “Jal Jeevan Mission”, the company was awarded two projects i.e., “Kerehalli Drinking Water Project” and “Chikkabenakal Drinking Water Project” which are located in the State of Karnataka.
The Bengaluru-based company has a significant involvement in the "Jal Jeevan Mission" of the Government of India, which reflects its commitment to critical water management initiatives. Its key projects include the Byrapura and Hiremagaluru LIS Project, the Karagada LIS Project, and others, primarily executed through lift irrigation systems. 
It has also 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.
Furthermore, Denta Water secured contracts for lift irrigation projects in various regions, such as Makali, Makali Hosahalli, Krishnapura, and neighboring villages in the Channapatna Taluk of Ramanagar District, Karnataka.
Denta Water & Infrastructure Ltd compares itself with major companies like Thermax Ltd., Voltas Ltd., GE Water and Process Technologies, and VA Tech WABAG Ltd. 
As of October 31, 2023, it has completed 27 projects related to water management infrastructure development and has 22 ongoing projects constituting an aggregate contract value of Rs 984.23 crore, out of which Rs 976.69 crore was related to water management projects and Rs 7.54 crore was related to infrastructure projects including railways (improvement of infrastructure) and roadways (roads and bridges construction). It has a total contract value of Rs 984.23 crore, has completed work amounting to Rs 211.29 crore, and has an outstanding order book of Rs 772.94 crore.
For fiscal 2022–23, the company’s revenue from operations has increased 45.79% to Rs 174.32 crore against Rs 119.57 crore for fiscal 2021–22, primarily driven by an increase in revenue from ongoing projects as well as the completion of pending orders during the year. Profit after tax increased by 30.71% to Rs 50.11 crore for Fiscal 2023 as compared to Rs 38.34 crore for Fiscal 2022.
For the three months ended June 30, 2023, revenue from operations stood at Rs 31.83 crore and profit after tax stood at Rs 8.12 crore.
SMC Capitals Limited is the sole book-running lead manager, and Integrated Registry Management Services Private Limited is the registrar of the offer. The equity shares are proposed to be listed on the BSE and NSE.

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