DreamFolks Services dazzles in debut, stock zooms 56% off issue price
DreamFolks Services made a strong stock market debut, with its shares listed at Rs 508.70, a 56% premium to the issue price of Rs 326 per share on the National Stock Exchange (NSE) on Tuesday. On BSE, the stock opened at Rs 505, a 55% premium on its issue price.
At 10:04 a.m.; Dreamfolks was trading at Rs 495.85, 52% above its issue price. So far, the stock has peaked at Rs 550 on the BSE and Rs 549 on the NSE in intraday trading.
DreamFolks is a dominant player and the largest airport services aggregation platform in India with a unique asset-light and capital-efficient business model.
DreamFolks provides services to all card networks operating in India including Visa, MasterCard, Diners/Discover and RuPay, as well as many top card issuers in India including ICICI Bank, Axis Bank, Kotak Mahindra Bank , HDFC Bank and SBI Cards. It is an asset-light business model that has won favor among air travellers.
The initial public offering (IPO) of Dreamfolks Services received a strong response from investors and was subscribed 57 times. The institutional investor share was subscribed 70.5 times, the wealthy investor share 37.6 times and the individual investor share 43.6 times.
DreamFolks plans to replicate its deep industry knowledge, technology innovation, process expertise and business model in new high growth markets/sectors.
The company enjoys over 95% market share in card-based lounge access thanks to its lean business model. While the valuation based on FY22 looks stretched, the full recovery of the business will be visible from FY23. Given the monopolistic nature of the business and the potential for further growth in the air travel and credit cards, ICICI Securities analysts had recommended to SUBSCRIBE to this issue for rating gains.
The company is highly dependent on card networks and card issuing companies. Competition from global players like Priority Pass and Dragon Pass are key risks and concerns, the brokerage had said in an IPO memo.
The aviation sector is one of the fastest growing sectors in India. The need for high-speed mobility across the subcontinent facilitates the growth of the aviation sector in India. As a result, the company has a unique business proposition among its customer base and also has an ambitious brand image that bodes well for the business in the long run. Considering the future prospects of the company and its ideal position as a first-mover advantage, brokerage firm Anand Rathi Share and Stock Brokers had said in an IPO note.
The company’s superb listing can be attributed to positive market sentiment, bright future prospects and phenomenal investor response. India’s aviation industry is on the cusp of exponential growth over the next two decades owing to its demographic advantages, potential growth in middle class incomes, increased business travel, reducing the cost of air travel and increasing travel in Tier 2 and 2. 3 destinations. The company will be one of the biggest beneficiaries of India’s increased air travel and due to its first-mover advantage and dominant position in the lounge access market, the company is poised to to grow exponentially in the future, said Santosh Meena, head of research. , Investmart swastika.