DreamFolks raises Rs253 crore from anchor investors

24 Aug 2022 , 11:57 AM

The Rs562 crore IPO of DreamFolks Services Limited is now open for subscription. DreamFolks Services has raised Rs252.9 crore from 18 anchor investors, including renowned international and domestic brands, just before the start of the subscription window. Some of the investors who acquired a share in the company through the anchor portion of the offering include Societe General, Mirae Asset India, BNP Paribas Arbitrage, and Aditya Birla Sunlife. The subscription period for the DreamFolks IPO begins today and runs through Friday, August 26.

This is the second initial public offering to hit primary markets recently.

About the IPO

The DreamFolks IPO is completely an offer for sale (OFS) by the company’s current shareholders and excludes a new equity share issuance. The absence of new issuance indicates that the company won’t get any money from the IPO. The Rs562 crore raised will be distributed to the selling stockholders.Currently, DreamFolks Services is owned entirely by the company’s promoters. After the IPO, their stake will drop to 67%, increasing public ownership of the company to 33%. Beginning today, investors may place bids in multiples of 46 shares in the price range of Rs308-326 per share.On September 6, the company’s shares will begin trading on stock exchanges.

Anchor Book Sees Decent Interest

Smallcap World Fund paid Rs72 crore for 22,08,598 equity shares in the company via the anchor method.Aditya Birla Sun Life Small Cap Fund has invested Rs20 crore in 6.13 lakh shares. Invesco India Multicap Fund, Abakkus Growth Fund, Quant Mutual Fund, PNB MetLife India, Societe Generale, and BNP Paribas Arbitrage are only a few additional investors.

Asset-light business model

An airport service aggregator company, DreamFolks offers a variety of services, including access to lounges, food and beverage options, spa services, meet and greet assistance, airport transfer services, transit hotels, baggage transfer, and much more. The company follows an asset-light business model that integrates global card networks in India, card issuers, and other corporate clients in India, including airline companies with various airport lounge operators and other airport-related service providers on a unified technology platform. Despite being a dominant competitor in the airport lounge aggregation market with solid client relationships and a growing services portfolio, experts do have some reservations about DreamFolks. Some of the concerns include a slowdown in travel, terrorism, and a high client and revenue concentration.

With a net profit of Rs16 crore in the previous fiscal year, the company is profitable. However, DreamFolks’ revenue has decreased from Rs367 crore in the fiscal year ending in March 2020 to Rs282 crore in the most recent fiscal year. But the future of air travel seems promising for business.