Dreamfolks Services IPO subscribed 6.09x on day 2 on strong retail investor demand

Dreamfolks Services IPO subscribed 6.09x on day 2 on strong retail investor demand
  • The IPO DreamFolks Services received good response from retail investors on day 2.
  • The company intends to raise ₹560 crore and set a price band of ₹308-326 per share.
  • The IPO is a complete offer for sale by promoters and shareholders.
  • Most analysts are bullish on the company and recommend subscribing to the IPO from a medium to long term perspective.
The IPO of DreamFolks Services has been subscribed 6.09 times over, on the second day of opening the issue, as of 5:00 pm today.

The public issue of the airport services aggregator, opened on August 24 and was fully subscribed by 1.96 times on the very first day. Demand from retail investors has been robust as this category has been subscribed 19.10 times.
Investor category Subscription as on August 25, 5:00 pm
Qualified Institutional Buyers (QIBs)0.60 times
Non Institutional Investors(NIIS)8.40 times
Retail 19.10 times
Total 6.09 times
The company set a price band of ₹308-326 per share. The shares of the company are currently commanding a grey market premium or GMP of ₹75 per share. It went up by a notch within a day, as it was at ₹65 yesterday.

GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges. The IPO opened on August 24, and will close on August 26.

Analysts bullish on DreamFolks
Most analysts have recommended subscribing to the IPO from a medium to long term perspective as DreamFolks is a dominant player in the airport service industry.

“The company enjoys over 95% market share in card-based lounge access with its asset light business model. While valuation based on FY22 looks stretched, the full business recovery will be visible from FY23,” said analysts at ICICI Direct Research.

ICICI Direct recommends a ‘subscribe’ as the company enjoys near monopoly in this segment.

“It has a strong business revenue potential over the next decade on the back of – healthy air traffic growth, increasing issuance of credit cards and better awareness of usage of cards for lounges and higher penetration from current low level of around 5%,” said brokerage Reliance Securities.
Angel OneSubscribe on the issue from a medium to long term perspective
SBI Capital SecuritiesSubscribe with a long term perspective.
Sushil Finance Investors can invest for medium to long term horizon
Anand Rathi SecuritiesSubscribe for long term
Reliance SecuritiesSubscribe
Nirmal Bang SecuritiesSubscribe
K R ChokseySubscribe
HEM SecuritiesSubscribe
Swastika SecuritiesSubscribe only for high risk investors
BP EquitiesSubscribe
The company allocated 77.59 lakh shares to 18 anchor investors at the upper price band of ₹326 per share. Smallcap World Fund, a California-based venture capital firm, bought a large pie i.e 28.46% of the shares set aside for anchor investors.

DreamFolks Services provides access to airport services such as food and beverage offerings, spa services, ‘meet and assist’, airport transfer services, transit hotels, nap room access and baggage transfer.

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