Rs 562 crore Dreamfolks Services IPO opens on Aug 24: All you need to know

Airport service aggregator Dreamfolks Services’ initial public offering (IPO) will open for subscription on Wednesday, August 24. The price band has been set in the range of Rs 308 to 326 per share and will close on Friday, August 26. The public issue is entirely an offer for sale (OFS) of up to 17.24 million equity shares.

Touted as India’s largest airport service aggregator platform, Dreamfolks Services has no listed peers at the bourses. The company facilitates customers’ access to airport related services like lounges, food and beverages, spa, meet and assist, airport transfer, transit hotels or nap room access, and baggage transfer.

At present, the company facilitates all the 54 lounges operational in India and enjoys market share of over 80 per cent in the domestic lounge access market.

That apart, it commanded a market share of over 95 per cent of all credit card and debit card access to airport lounges at the end of fiscal 2021-22 (FY22).

Here is a checklist of what investors should bear in mind before they subscribe to Dreamfolks IPO:

Subscription date: The 3-day public issue opens on Wednesday, August 24 and will close on Friday, August 26.

Price band, issue size, and m-cap: At the upper end of the price band of Rs 308-326, the issue size comes to Rs 562 crore. Investors can bid for a lot of 46 shares and in multiples thereof. The post-issue implied market capitalization is likely to be Rs 1,609 crore to Rs 1,703 crore.

Grey market premium: According to IPO watch, shares of Dreamfolk Services were trading at a premium of Rs 85 per share in the grey market. This means that the company’s shares may list at Rs 411 per share against the upper price band of the issue price.

Issue break-up: The public offering is reserved 75 per cent for qualified institutional buyers, 15 per cent for the non-institutional buyers, and 10 per cent for retail investors. Post the issue, the company would not receive any IPO proceeds and the promoter group would comprise 67 per cent of shareholding, whereas the rest 33 per cent would go to the public.

Allotment date and listing: The tentative date for allotment of Dreamfolks IPO shares is September 1, 2022. The company will likely list on exchanges NSE and BSE on September 6, 2022.

Financial overview: Dreamfolks Services’ revenue from operations grew 167.5 per cent to Rs 282.5 crore at the end of FY22 from Rs 105.6 crore in FY21. Net profit margin, too, rose to 5.75 per cent in FY22 from 1.37 per cent in FY21. Ebitda margin, meanwhile, climbed to 8.4 per cent in FY22 from 1.9 per cent in FY21.

Competitive strengths: According to Axis Capital, the company is a dominant player in the airport lounge aggregation industry in India, and enjoys first-mover’s advantage. As of March 31, 2022, the company provided consumers access to 244 touch points in India and 1,172 touch points overseas. Services like food and beverages, spa services, transit hotels, baggage transfers to consumers are incremental value-added services. Moreover, the company is able to capitalize on growing the consumer base of air traffic passengers and card users without incurring any direct, consumer acquisition cost. Further, the company’s minimal capital deployment results in high operating leverage, analysts said.