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Dreamfolks IPO Review 2022 – GMP, Strengths, Weaknesses & More!

ByAnoushka Roy

Aug 22, 2022
Dreamfolks IPO Review 2022 – GMP, Strengths, Weaknesses & More!


Dreamfolks IPO Review: Dreamfolks Services Limited is coming up with its Initial Public Offering. The IPO will open for subscription on August 24th, 2022, and close on August 26th, 2022. It is looking to raise Rs 562.10 Crores whole of which will be an offer for sale.

In this article, we will look at the Dreamfolks IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out!

About The Company

DreamFolks acts as a service provider between the lounge operators on one side, and banks, card networks, airlines, and corporates on the other end. The company also leverages technology and offers the solution through Omni channels such as App-based access, tracking live benefits on each card. 

DreamFolks covers most of the banks in India, it covers India’s largest private and public sector card issuing companies such as HDFC Bank Limited, SBI Cards, Payment Services Limited, and ICICI Bank Limited.

The company is a key player in the Indian market and currently accounts for more than 80%, of the total lounge traffic in major cities like Bangalore, Mumbai, Cochin, and Ahmedabad to name a few.

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Other services of the company include:

  • Meet and Assist
  • Transit Hotels / Nap Rooms
  • Food and Beverages
  • Airport Transfers
  • Spa
  • Door-step Baggage Services

Dreamfolks IPO Review – Financial Highlights

Dreamfolks IPO Review - Financials

(Source: DRHP of the company)

Dreamfolks IPO Review – Competitors

Competitors

(Source: DRHP of the company)

Dreamfolks IPO Review –  Industry Overview

The airport lounges have grown steadily in India over the past 5 years.  The Indian Airports average around 2 lounges per airport. The Indian lounge market is expected to grow at four times the current market size and is expected to reach 204 lounges by 2040.

Indian domestic air travel passenger is expected to grow at a CAGR of around 36% and surpass 280 million between 2021-2025. The international Indian air travel market is expected to almost grow at 31% CAGR between 2021-2025. 

Dreamfolks IPO Review - Industry Overview

(Source: DRHP of the company)

The credit card market grew from around 33 million outstanding cards in Sept 2017 to around 65 million outstanding cards in Sept 2021 at a CAGR of 18.17%. The number of outstanding credit cards in Dec 2021 was 68 million while the number of debit cards issued was 937 Million.

Strengths of the Company

  • It is a dominant player that has 100% lounge coverage in India with significant exclusivity for India-issued credit and debit card programs in key locations.
  • It accounts for almost 95%-97% of the India-issued debit and credit card-based access to the airport lounges as in FY20.
  • Has a strong and long-standing relationship with marquee Clients including global card network providers in India and prominent Indian and global banks and corporates.
  • The company has a growing customer base with zero direct cost of acquiring them.
  • The company has its own proprietary technology platform that ensures the scalability of the business.

Weaknesses of the Company

  • A large portion of their revenue comes from a single source i.e, card issuer financial institutions.
  • The business is heavily dependent on the air travel industry. Any event like covid can have an adverse impact on their operations.
  • Their business also relies on the Cards that are in circulation and on the issuance of new credit and debit cards.
  • The company is potentially near the saturation of Indian markets and is required to expand into the global markets for growth.
  • The company is technology driven and is susceptible to cyber-attacks.

Dreamfolks IPO Review – Grey Market Information

The shares of Dreamfolks traded at a premium of 24.54% in the grey market on August 22nd. The shares tarded at Rs 406. This gives it a premium of Rs 80 per share over the cap price of Rs 326.

Dreamfolks IPO Review – Key IPO Information

Dreamfolks IPO Review - share holding

Promoters: Liberatha Peter Kallat, Mukesh Yadav, and Dinesh Nagpal

Book Running Lead Managers: Equirus Capital Private Limited and Motilal Oswal Investment Advisors Limited

Registrar To The Offer: Link Intime India Private Limited

Particulars Details
IPO Size ₹562.10 Crores
Fresh Issue
Offer for Sale (OFS) ₹562.10 Crores
Opening date August 24, 2022
Closing date August 26, 2022
Face Value ₹2 per share
Price Band ₹308 to ₹326 per share
Lot Size 46 Shares
Minimum Lot Size 1 (46 shares)
Maximum Lot Size 13 (598 shares)
Listing Date September 6, 2022

The Objective of the Issue

The company will not directly receive any proceeds from the Offer and the entire Offer Proceeds will be received by the Selling Shareholders, in proportion to the Offered Shares sold by the respective Selling Shareholders as part of the Offer.

In Closing

In this article, we looked at the details of Dreamfolks IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for the investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

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