50Shares of DreamFolks Services, the country’s largest airport service aggregator, made a strong debut on the domestic bourses on Tuesday. The listing is in line with D-Street expectations as the stock was trading at a premium of ₹110 in the grey market, an informal market where deals are done in-person only among the trusted group of investors. The stock listed at a premium of 56% as investors piled into the IPO of the airport service aggregator platform in sharp contrast to the muted broader market trend, with the Sensex and the Nifty trading lower near the base line.
The share price of DreamFolks listed at ₹505 on the Bombay Stock Exchange (BSE), up 54.9% against the upper price band of issue price of ₹326 per equity share. On the National Stock Exchange (NSE), the counter opened 56% higher at ₹508.70 apiece.
Post listing, DreamFolks shares moved further higher and touched an intraday high of ₹550 on the BSE, up 68.7% from the issue price, on the back of the strong volume. Similarly, it hit an intraday high of ₹549 on the NSE.
On the volume front, there was a spurt in volume as 9.4 lakh shares worth ₹48 crore changed hands over the counter on the BSE, while the market capitalisation climbed to ₹2,430.93 crore.
DreamFolks has raised ₹562 crore from its initial public offering (IPO), which opened for subscription between August 24 to August 26. The company had fixed offer price at ₹308 to ₹326 per equity share. The minimum investment limit was 46 equity shares and in multiples of 46 shares thereafter. The floor price was 154 times the face value of the equity shares and the cap price was 163 times the face value of equity shares.
The IPO received an overwhelming response from investors, with the issue subscribing 56.68 times on the final day of the bidding. The quota for retail investors (RIIs) was booked 43.66 times, the portion for non-institutional investors received 37.66 times bid and the quota for qualified institutional buyers (QIBs) was subscribed 70.53 times. The IPO was fully subscribed within hours on opening day on August 24.
The issue was completely an offer for sale (OFS) by existing promoters - Non-executive directors Mukesh Yadav and Dinesh Nagpal, and Liberatha Peter Kallat, the chairperson and managing director of the company.
Most of the domestic brokerages such as Angle One, ICICI Direct, Jainam Broking limited, Swastika Investmart Ltd, and KR Choksey Securities Ltd have recommended a “Subscribe” rating to Dreamfolk Services’ IPO.
Analyst at Angle One has given a “Subscribe” rating to the IPO from a medium to long term perspective, citing that Dreamfolks has 100% market share in facilitating 54 lounges currently operational in India and it also has over 95% market share of all India issued credit and debit cards access to the airport lounges. The company’s focus on diversifying and increasing its services portfolio also augur well for the stock.
ICICI Direct has also assigned “Subscribe” rating to Dreamfolk’s IPO, saying that the company has a unique, asset light, capital efficient business model.
Dreamfolks Services is a dominant player in the airport lounge aggregation industry in India with strong tailwinds. It has an asset-light business model that 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. It provides airport-related services such as lounge access, food and beverage, meet and assist, transit hotels/nap room access, baggage transfer, spa services, airport transfer services.
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