DreamFolks Sees A Fantastic Listing On A Large Client Base

Experts predict that DreamFolks Services will see healthy listing gains on September 6, backed by strong IPO subscription and market leadership in the airport lounge aggregation industry supported by an asset-light and capital-efficient business model.

Experts estimate that DreamFolks was trading at a 30-40% premium in the grey market on September 5 over its issue price of Rs 326 per share. The grey market is an unofficial trading platform for IPO shares that generally provides an indication of the listing price.

The initial public offering (IPO) of India's largest airport service aggregator was well received, with the issue being subscribed to 56.68 times between August 24 and August 26. Bids were received for 53.74 crore equity shares, with an offer size of 94.83 lakh shares.

Qualified institutional investors took the lead, purchasing shares at a rate that was 70.53 times the allotted quota. The portion reserved for non-institutional investors was bid on 37.66 times, and retail investors bid on 43.66 times the number of shares reserved for them.

"Considering excellent response from QIB & HNI, we assume listing would be above Rs 420 levels, which translates to more than 29 percent premium over the upper end of the IPO price Rs 326,"  said Prashanth Tapse, Senior VP Research at Mehta Equities.

Strong listing gains appear to be justified and sustainable, he said, even though the issue was aggressively priced as secondary market sentiments improved. The company also has a first-mover advantage in the segment due to its unique, asset-light, and capital-efficient business model, which will benefit the company in the long run.

According to Astha Jain, a senior research analyst at Hem Securities, DreamFolks will be listed at a premium of more than 35%. DreamFolks is India's largest airport lounge access provider, with a market share of more than 95 percent of all India issued card-based access to domestic lounges in FY22.

As of March 2022, it has coverage across 54 operational airport lounges, accounting for 100 percent of airport lounges in India. It has agreements with all five Indian card networks, including Visa, Master Card, Diners/Discover, and RuPay.