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Dreamfolks Services to list on Tuesday. What should investors know

The company launched its nearly Rs562 crore initial public offering (IPO) from August 24 to August 26 and received strong demand across investor categories.  (iStock)Premium
The company launched its nearly Rs562 crore initial public offering (IPO) from August 24 to August 26 and received strong demand across investor categories.  (iStock)

  • DreamFolks Services is a dominant player and India's largest airport service aggregator platform facilitating an enhanced airport experience to passengers leveraging a technology-driven platform.

The country's largest airport service aggregator platform, DreamFolks Services to make its debut on Tuesday on stock exchanges. The company launched its nearly Rs562 crore initial public offering (IPO) from August 24 to August 26 and received strong demand across investor categories. The IPO had subscribed by 56.68 times. Currently, DreamFolks IPO grey market premium (GMP) is around 105.

On Monday, NSE in its statement said, DreamFolks Services will be listed and admitted to dealings on the exchange from September 6. Trading shall be in the Normal Market segment – Compulsory Demat (Rolling Settlement) for all investors.

The IPO comprised of an offer for sale (OFS) where promoters of the company offloaded 1,72,42,368 equity shares. The promoters are Liberatha Peter Kallat, Dinesh Nagpal, and Mukesh Yadav. The IPO had a price band of 308 to 326 per equity share.

The IPO was subscribed by 56.68 times. Qualified institutional investors (QIBs) subscribed by 70.53 times against the portion offered to them, while non-institutional investors (NII) and retail individual investors (RII) oversubscribed by 37.66 times and 31.10 times against their reserved portion in the IPO.

As per IPO Watch, DreamFolks IPO GMP is around 105 per equity share on Monday. A grey market is where a company's shares are offered unofficially to traders.

With GMP being 105 per share, Dreamfolks listing can be around 431 per share (upper price band of 326 per share + 105 per share).

What should investors know about DreamFolks Services listing? 

DreamFolks Services is a dominant player and India's largest airport service aggregator platform facilitating an enhanced airport experience to passengers leveraging a technology-driven platform.

Analysts at Ventura Securities in their report dated August 25, said, "At the IPO price of INR 326 (upper price band), Dreamfolks’ is valued at FY22 P/E of

104.8X. Dreamfolks is expected to benefit from its leading position and the upcoming growth opportunities in the aviation sector, however, we would like to monitor the operating performance post listing to gain confidence. We recommend a NEUTRAL rating on the stock."

Between FY20-22, Dreamfolks’ revenue declined at a CAGR of 12.3% to 283 crore, which was primarily due to a 14.9% CAGR decline in passenger volumes to 3.5 million using Dreamfolks lounge services. The industry witnessed a 17.0% CAGR decline in passenger volumes to 5.2 mn using lounge services.

"With the easing travel restrictions, we are expecting Dreamfolks’ revenue and profitability to recover to the pre-pandemic period levels of FY20," the analysts report said.

Also, Akansha Jain Senior Research Analyst at Nirmal Bang in her report last month said, "Going ahead, FY22 being covid impacted, we feel, FY23 is expected to be a pent up growth year. We expect, the company to post sales of 529.1 crore and 714 crore for FY23E, and FY24E respectively. (I.e. growth of 87.3% for FY23E , 35% for FY24E). With higher sales, we expect margins to improve to 10% and 10.7% for FY23E & FY24E respectively from 8% in FY22. We expect, Adj Pat of 38 crore and 55.7 crore for FY23E & FY24E respectively."

 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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