DreamFolks IPO sails through on day one as retail investors oversubscribe, NIIs follow, QIB demand muted

DreamFolks Services IPO sailed through on the initial data of sale with retail investors leading the subscription tally. The Rs 562 crore IPO opened for subscription earlier today after having raised Rs 252.9 crore from 18 anchor investors. The public issue saw massive interest from retail investors who have oversubscribed their portion of the initial public offering. Demand from Non-Institutional Investors (NII) was also decent while qualified institutional buyers (QIB) were nowhere to be seen. The issue will remain open for investors to bid, till Friday, August 26. Investors can bid in the fixed price band of Rs 308-326 per share.

So far on the first day of subscription, retail investors have bid for their portion 6.39 times. Bids have come in for 1,10,09,502 equity shares against the 17,24,236 equity shares offered to retail investors. Most of the bids have been placed at the cut-off value. NII portion of DreamFolks IPO received bids for 15,34,330 equity shares, which is 0.59 times the 25,86,355 equity shares that are offered. QIB portion garnered just 9,108 bids. Overall the issue has been subscribed 1.32 times so far.

DreamFolks is an airport service aggregator that provides services such as Lounge Access, Food & Beverage offerings, Spa Services, and much more to travellers. The asset-light model of the company is seen as a positive, however, any disruption to air traffic in the country could be a major threat to DreamFolks. The company raised Rs 252.9 crore earlier yesterday from 18 anchor investors which included leading global as well as domestic investors.

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The DreamFolks IPO is entirely an Offer For Sale (OFS) by existing shareholders, hence the company will not get funds from the IPO. Analysts at AngelOne have pinned a Subscribe rating on the public issue, valuing the firm at 104.8x FY22 EPS post issue. Meanwhile, Hem Securities believes the issue at price band of Rs 308-326 per share is at p/e multiple of 104x on FY22 PAT basis. Both AngelOne and Hem Securities have ‘Subscribe’ rating on the IPO.

“Company’s success is dependent on its long-term relationship with card networks and card issuer financial institutions, which on average contributed 98.98% of company’s total revenue from the operations during the Fiscals 2022, 2021 and 2020,” Hem Securities said while highlighting the risks associated with the issue.