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Dreamfolks Services IPO: The initial public offering (IPO) of airport service aggregator platform Dreamfolks Services opened for subscription on Wednesday, August 24, 2022, and was oversubscribed within a few hours on the first day of bidding.
The issue opened for public subscription at 10 am and was subscribed 1.05 times as on 1:36 pm. It received total bids for 99,48,328 shares across both the stock exchanges against 94,83,302 shares on offer, data from National Stock Exchange (NSE) showed.
The Rs 562.1 crore Dreamfolks Services IPO will be available for subscription till Friday, August 26, 2022, and the price band of the company has been fixed at Rs 308-326 per share.
Dreamfolks Services IPO is entirely an offer for sale of up to 1.72 crore (1,72,42,368) equity shares by promoters – Liberatha Peter Kallat, Mukesh Yadav and Dinesh Nagpal, and the company will not receive any proceeds from the offer, according to the information provided in the red herring prospectus (RHP).
Dreamfolks Services is the country’s largest airport service aggregator platform facilitating enhanced airport experience to passengers through a technology-driven platform. Its asset-light business model integrates
card networks, card issuers and other corporate clients with various airport lounge operators and other airport related
service providers on a unified technology platform.
“We facilitate customers of Clients’ (Consumers) access to the following airport related services (i) lounges, (ii) food and beverage (iii) spa, (iv) meet and assist, (v), airport transfer (vi) transit hotels /nap room access, and (vii) baggage transfer, (collectively, the Services),” the company said in its RHP.
Dreamfolks Services has coverage across 54 operational airport lounges constituting 100 per cent of airport lounges across domestic and international terminals as of March 31, 2022. Also, as of March 31, 2022, the company had exclusivity to provide access to 12 domestic lounges across 11 airports in India constituting around 22.22 per cent of the total access of the domestic lounges for India-issued credit cards and debit cards.
Further, in the financial year 2021-22, the company catered to approximately 68 per cent of the overall lounge traffic in volume across all lounges in Indian airports (both the domestic and international lounges), the RHP said citing F&S Report.
Three-fourths of the issue size of Dreamfolks Services IPO has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.
Investors who wish to subscribe to Dreamfolks Services IPO can bid in a lot of 46 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,996 to get a single lot of Dreamfolks Services. The shares will be listed on both BSE and NSE.
The applicants also must note that the cut-off time for UPI mandate confirmation is Monday, August 29, 2022, upto 12:00 pm. If they fail to do so then their application may not be considered.
Equirus Capital and Motilal Oswal Investment Advisors are the book-running lead managers to the offer while Link Intime India is the registrar of the issue.
Before heading into the IPO, Dreamfolks Services on Tuesday raised nearly Rs 253 crore (Rs 2,52,94,55,516) from 18 anchor investors in lieu of 77,59,066 equity shares at Rs 326 each, data from the stock exchanges showed.
The anchor investors include Smallcap World Fund, Aditya Birla Sun Life Mutual Fund (MF), Sundaram MF, Kuber India Fund, Saint Capital Fund, PNB Metlife India Insurance Company, Societe Generale, BNP Paribas Arbitrage, Segantii India Mauritius, Quant MF among others.
The research teams at Reliance Securities and Swastika Investmart in their respective IPO notes have given a “Subscribe” rating to the offer.
Arafat Saiyed, Senior Research Analyst at Reliance Securities, in their report said, ” It has a strong business revenue potential over next decade on the back of a) Healthy air traffic growth, b) Increasing issuance of credit cards and c) Better awareness of usage of cards for lounges and higher penetration from current low level of ~5%. In view of strong business moat, healthy recovery in Air Passenger traffic, increase Lounge services, multi-fold revenue growth potential, unique asset light and efficient business model, we recommend SUBSCRIBE to the issue.”
Commenting on the Dreamfolks IPO, Ravi Singh, vice president and head of research at Share India Securities told indianexpress.com, “Dreamfolks Services company has the advantage of its first mover in this business. However, the company faced headwinds due to the pandemic-led industry issues and the same is being reflected in its growth numbers, leading to higher valuations. Though the company’s asset-light business model will benefit it in long run. We recommend subscribing to this IPO for a medium to long term perspective.”
The share allotment is likely to take place on Thursday, September 1, 2022, and the shares are expected to be listed on Tuesday, September 6, 2022, according to the timeline given in the RHP.
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