IPO Watch:Incofin’s Water Access Acceleration Fund, Mukul Agrawal backed Rite Water Solutions files draft papers for IPO

IPO Watch: Rite Water Solutions (India) has filed its draft red herring prospectus (DRHP) with the capital market regulator, Securities and Exchange Board of India (SEBI), for an initial public offering (IPO).

A Clean-tech company based in Nagpur has evolved from being a provider of water technology solutions to a prominent player in the Clean-tech sector. It delivers a wide array of solutions and services that include water management, solar agriculture, and IoT-enabled systems, focusing heavily on rural sustainability and large-scale execution.

According to a report by 1Lattice cited in the DRHP, the company is recognized as the second fastest-growing entity in the water sector by revenue from Fiscal 2022 to 2024, with its EBITDA margin improving from 11.32% to 34.77% during that timeframe.

Rite Water’s clientele consists of state government entities, organisations, and private sector companies, with robust collaborations under major government initiatives such as the Jal Jeevan Mission (JJM), PM Kusum Scheme, and the National Mission for Clean Ganga (NMCG). As of December 31, 2024, the total value of orders stood at ₹1,723.13 crore.

The company’s operational revenue surged by 69.76%, reaching ₹202.75 crore in fiscal 2024, up from ₹119.43 crore in fiscal 2023, mainly due to the swift implementation of electro-chlorination projects awarded in fiscal 2022 and 2023, along with an order for solar pump supplies. The profit after tax increased by 96.95%, amounting to ₹49.28 crore in fiscal 2024, compared to ₹25.02 crore in fiscal 2023.

The IPO is being backed by the Water Access Acceleration Fund S.L.P. (“W2AF”), which is organised and operates under the laws of France. The fund is managed by Incofin Investment Management, based in Belgium, and holds a 16.18% stake in the IPO. Additionally, prominent investor Mukul Agrawal supports the initiative with a 2.89% stake, as detailed in the Draft Red Herring Prospectus (DRHP).

IPO details

The IPO has a face value of ₹2 and includes a fresh issue of equity shares worth up to ₹300 crore, alongside an offer-for-sale amounting to ₹445 crore by the Promoter and other Investor Selling Shareholders.

Within the offer-for-sale, Vinayak Shankarrao Gan will be selling shares valued at up to ₹85 crore, Abhijeet Vinayak Gan up to ₹90 crore, and the Water Access Acceleration Fund S.L.P. is set to offer shares worth up to ₹270 crore. This combination aims to provide both fresh investment and liquidity for existing shareholders.

The company, after consulting with the BRLMS, may explore the option of issuing specified securities totaling up to ₹60 crore as a pre-IPO placement. Should the pre-IPO placement be finalized, the funds generated will be deducted from the fresh issue amount.

The funds from the fresh issue, which is set at ₹225 crore, will be allocated to support the company’s working capital needs and other general corporate activities.

JM Financial Limited and Axis Capital Limited are serving as the book-running lead managers, while Bigshare Services Private Limited will act as the registrar for the issue.

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