DreamFolks Services dazzles on debut, stock zooms 56% over issue price

DreamFolks Services made a strong stock market debut, with its shares listed at Rs 508.70, a 56 per cent premium when compared with the issue price of Rs 326 per share on the National Stock Exchange (NSE) on Tuesday. On the BSE, the stock opened at Rs 505, a 55 per cent premium over its issue price.

At 10:04 am; Dreamfolks traded at Rs 495.85, a solid 52 per cent higher against its issue price. The stock hit a high of Rs 550 on the BSE and Rs 549 on the NSE in intra-day trades so far.

DreamFolks is a dominant player and India’s largest airport service aggregator platform having a unique, asset light, capital efficient business model.

DreamFolks’ provides services to all the card networks operating in India including Visa, MasterCard, Diners/Discover and RuPay and many of India’s prominent card issuers including ICICI Bank, Axis Bank, Kotak Mahindra Bank, HDFC Bank and SBI Cards. It has been an asset-light business model gaining the preference of air travelers.

The initial public offering (IPO) of Dreamfolks Services received strong response from the investors with issue got subscribed 57 times. The institutional investor portion was subscribed 70.5 times, the wealthy investor portion by 37.6 times, and the retail investor portion by 43.6 times.

DreamFolks plans to replicate its deep knowledge of the industry, technology innovation, process expertise and business model across new high growth markets/sectors.

The company enjoys over 95 per cent market share in card based lounge access with its asset light business model. While valuation based on FY22 look stretched, the full business recovery will be visible from FY23. Given the monopolistic nature of business and further growth potential in the air travel and credit card segment, analysts ICICI Securities had recommended SUBSCRIBE to this issue for listing gains.

The company has high reliance on card networks and card issuer companies. The competition from global players like Priority Pass and Dragon Pass are key risks & concerns, the brokerage firm had said in an IPO note.

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. Accordingly, the company has a unique business proposition amongst its customer base and also has an aspirational brand image which augurs well for the company in the long term. Considering the future prospect for the company and it being placed at a sweet spot as the first mover advantage, the 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 sentiments, bright future prospects, and a phenomenal response from investors. The Indian aviation industry is at the cusp of exponential growth in the next two decades due to its demographic advantages, the potential growth in middle-class income, rising business travel, reduced cost of air travel and increased travel in Tier-2 and Tier-3 destinations. The company will be one of the biggest beneficiaries of the rising air travel in India and due to its first mover advantage and dominant position in the lounge access market, the company is poised to grow exponentially in the future, said Santosh Meena, Head of Research, Swastika Investmart.

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