Business Profile of Rites Water Solutions Limited
Rite Water Solution was established in Nagpur in 2006 and the company offers diverse solutions for rural & urban transformations focused on water solutions, solar agriculture solutions, and Internet on Things (IOT) solutions for energy. The company focused on sustainability clean water and energy solutions by leveraging innovation in water and energy management. In water solutions, the company delivers products for rural, urban, and industrial solutions. In the solar category company delivers solar water pumps and solar cold storage for farmers' use and in IOT Company uses this technology to collect useful information related to water like water quality, flow, and residual chlorine in water.
Rites Water Solutions Limited IPO Objective
As per the draft red hearing prospects, the IPO issue consists of fresh issue and offer for sale. The fresh issue consists of XXXX shares at the face value of ₨ 2 each aggregating up to ₹ 3,000.00 million and OFS up to XXXX Equity Shares at the face value of ₨ 2 each aggregating up to ₹ 4,450.00 million. There are fresh issue and OFS shares by company and main objective of company is funding working capital requirements and general corporate purpose of company.
IPO Details of Rites Water Solutions Limited
| IPO Open Date | N.A. |
| IPO Close Date | N.A. |
| Basis of Allotment | N.A. |
| Listing Date | N.A. |
| Face Value | ₹2 per share |
| Price | N.A. |
| Lot Size | N.A. |
| Total Issue Size | Up to XXXX Equity Shares |
| Aggregating up to ₹ 7,450.00 million | |
| Fresh Issue | Up to XXXX Equity Shares |
| Aggregating up to ₹ 3,000.00 million | |
| Offer For Sale | Up to XXXX Equity Shares |
| Aggregating up to ₹ 4,450.00 million | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not more than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Issue Price & Size: Rites Water Solutions Limited IPO
The issue price of Rites Water Solutions Ltd hasn’t been released yet. Upon releasing the dates, the investors can bid between those price ranges. The company has an offer for sale of XXXX equity shares at the price of ₨XXXX and fresh issue of XXXX equity shares aggregating up to ₹ 3,000.00 million.
Launch Date of Rites Water Solutions Limited
The IPO opening date of Rites Water Solutions Ltd hasn’t been officially announced yet, upon the declaration of dates investor can bid for IPO.
Rites Water Solutions Limited Financial Statements
| Particulars | Ended December 31, 2024 | Mar 31, 2024 |
Mar 31, 2023 |
Mar 31, 2022 |
| Income | ||||
| Revenue From Operations | 3,056.79 | 2,027.49 | 1,194.34 | 768.14 |
| Other Income | 39.69 | 40.94 | 21.52 | 20.45 |
| Total Income | 3,096.48 | 2,068.43 | 1.215.86 | 788.59 |
| Expenses | ||||
| Cost of materials consumed | 1,345.78 | 703.34 | 348.66 | 227.36 |
| Purchase of Stock in trade | 0.69 | 0.19 | 0.35 | 0.06 |
| Changes in inventories of finished goods |
- | 7.70 | ( 7.70 ) | 15.18 |
| Employee benefits expense | 117.08 | 111.50 | 92.53 | 47.54 |
| Finance costs | 19.29 | 22.67 | 18.69 | 18.73 |
| Depreciation and amortization expense | 23.53 | 16.79 | 7.43 | 3.64 |
| Other expenses | 621.75 | 499.79 | 395.56 | 391.01 |
| Total Expenses | 2128.12 | 1,361.98 | 855.52 | 703.52 |
| Restated Profit / ( loss ) before tax | 968.36 | 706.45 | 360.34 | 85.07 |
| Tax expense | ||||
| Current tax | 272.82 | 165.89 | 62.29 | 29.40 |
| Deferred tax | ( 19.52 ) | 47.76 | 47.84 | ( 31.08 ) |
| Total Tax expense | 253.30 | 213.65 | 110.13 | ( 1.68 ) |
| Restated Profit / ( loss ) after tax for the period |
715.06 | 492.80 | 250.21 | 86.75 |
| Revenue from Operations (₨ millions) | 3,056.79 | 2,027.49 | 1.194.34 | 768.14 |
| Revenue Growth | NA | 69.76 % | 55.48 % | NA |
| Revenue from Operations Split | ||||
| A ) Water Solutions | 910.91 | 1,605.41 | 1,194.34 | 768.14 |
| B ) Solar Agriculture Solutions | 1,848.48 | 334.72 | - | - |
| C ) IoT Solutions | 297.40 | 87.36 | - | - |
| EBITDA | 971.49 | 704.97 | 364.94 | 86.99 |
| EBITDA Margin | 31.78 % | 34.77 % | 30.56 % | 11.32 % |
| PAT | 715.06 | 492.80 | 250.21 | 86.75 |
| PAT Margin | 23.39 % | 24.31 % | 20.95 % | 11.29 % |
| Return on Capital Employed | 26.96 % | 27.22 % | 36.66 % | 9.81 % |
| Return on Equity | 23.39 % | 21.04 % | 26.85 % | 12.72 % |
| Cashflow from Operations | ( 1,162.17 ) | ( 219.18 ) | 317.77 | 0.96 |
| Net Debt to EBITDA Ratio | 0.30 | ( 1.32 ) | ( 0.67 ) | 0.48 |
| Trade Receivable Days | 162 | 52 | 53 | 140 |
| Inventory Days | 74 | 37 | 20 | 15 |
| Cash Conversion Cycle | 186 | 38 | 11 | 98 |
| Total Borrowings | 459.29 | 186.46 | 43.46 | 167.62 |
| Debt to equity ratio | 0.15 | 0.08 | 0.05 | 0.25 |
Rites Water Solutions Limited Promoters & Shareholding
As of date, there are two promoters of the company. The promoter along with promoter group in aggregate collectively holds 94.48% of the paid-up share capital of company.
| Pre-Offer | Post-Offer | |||
| Name of Shareholder | No. of Shares | Shareholding (%) | No. of Shares | Shareholding (%) |
| Promotors | ||||
| Vinayak S. Gan | 34,951,200 | 48.85 | [●] | [●] |
| Abhijeet V. Gan | 22,381,050 | 31.28 | [●] | [●] |
| Total (A) | 57,332,250 | 80.13 | [●] | [●] |
| Promoters Group | ||||
| Omkar Vishwas Pathak. | 5,250,000 | 7.34 | [●] | [●] |
| Vishwas Vasant Pathak | 2,550,000 | 3.56 | [●] | [●] |
| Mukul Mahavir Agrawal | 2,467,500 | 3.45 | [●] | [●] |
| Water Access Acceleration Fund S.L.P | Nil | 3.20 | [●] | [●] |
| Total (B) | 1,02,67,500 | 14.35 | [●] | [●] |
| Total (A+B) | 67,599,750 | 94.48 | [●] | [●] |
Should You Subscribe to Rites Water Solutions Limited IPO or Not
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of Rites Water Solutions Limited:
Comprehensive solution in clean-tech projects
The company is the only player in the market with a diverse offering for rural transformation in which the company focuses on water solutions, solar agriculture solutions, and IOT solutions for energy. Rite Water Ltd. has a comprehensive portfolio with a wide range of application products in wastewater treatment, disinfection, purification, water supply, solar-powered irrigation pumps, and cold storage. Through this company range of climate based solution that solves various environmental problems.
Satisfied track record in past projects
Rite solution ltd. have proven track record of completion of complex projects at pan India. Company has expertise in ability to scale operations with industry knowledge & technical know-how like project of electro chlorination plants in Maharashtra across 17000+ villages under Jal Jevan Mission shows its potential for work. In this company diverse portfolio help to deliver impactful projects in India.
Asset light model business
Company focus its manufacturing on its core competences by manufacturing only necessary components through this company focus on specific area where they have expertise. Assets light model reduce the capital expenditure and help in scalability & flexibility by outsourcing of non-core manufacturing components. Through outsourcing company can also leverage advantage of supplier capability.
Strategic partnership
The company has a long-standing track record of more than 16 years of collaboration with the government in completing large projects. Rites Solution Ltd. has involvement in government schemes like the PM kusum scheme, Jal Jevan Mission and NMCG etc. These projects in partnership with government help company to operate and complete projects at large scale, it also encourage private player to collaborate with company. By ensuring balanced allocation of projects in solar, water and IOT solution Company ensure financial stability and growth.
Risk Factors of RITES WATER SOLUTIONS LIMITED
Dependency on government projects
Company operations related to business, financial condition, and other factors are majorly influenced by government policy and decisions, specifically funding allocation for water solutions and renewable energy. Any change in government policies due to political shifts of leadership, low budget, and economic conditions will affect business operations adversely. Additionally, company dependence on tender floated by government authorities also raises risk for company working. The majority of revenue for the company comes from government-bidding contracts.
Concentration of revenue
The company depends majorly on its revenue from its top five clients, these top five customers vary their orders yearly depending on nature and value received. Any loss in these clients due to loss of renewal of existing arrangements with clients, limitation to meet any change in quality & technology and dispute with customers could negatively affects profits margins and business operations of company.
Risk of blacklisting
Companies work with state government organizations and it is necessary for companies to enter into contracts with different government authorities. In this company requires to maintain a strict performance standard with government authorities. If the company fails to perform these obligations of the contract there is a high possibility of risk for company blacklisting and such blacklisting can affect company goodwill negatively and future cashflow earnings of the company. In the past due to the non-completion of construction work within the pre-decided period company had faced blacklisting.
Geographical constraints
Company is exposed to the risk of geographical constraint because company only manufacturing & assembling unit is situated in Nagpur, Maharashtra. Any regional economic slowdown in this region and other social, political & civil disruption or any natural calamities could change the business strategy for operation which negatively affects company profits and financial conditions.
Rites Water Solutions Limited Grey Market Premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the Rites Water Solutions Ltd is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
