DreamFolks Services IPO GMP, Subscription, Review; Should you buy on the last day?

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DreamFolks Services IPO Last day of subscription: DreamFolks Services’ initial public offering (IPO) was booked 6.09 times through the second day of the auction, enjoying good support from retail investors. DreamFolks Services is seeking to raise Rs 562 crore through the issuance, entirely a put offer, at the upper end of the price range of Rs 308-326 per share. The DreamFolks IPO closes Friday, August 26. DreamFolks facilitates an enhanced airport experience for passengers, leveraging its technology-driven platform and facilitates consumer access to airport-related services such as lounges, food and beverage, spa, meeting and assistance with airport transfer, transit hotels, access to nap rooms and baggage transfer services.

DreamFolks Services IPO: Subscription Status

The commercial part of DreamFolks Services IPO was subscribed 19.1 times. The total issue size was reduced to 94.83 lakh shares from 1.72 crore shares after DreamFolks raised Rs 253 crore via its anchor book on August 23. Non-institutional investors offered 8.4 times the shares reserved for them, while the share of qualified institutional buyers was reserved at 60%.

DreamFolks Services IPO: IPO Details

Investors can bid on a minimum of 46 shares and thereafter on multiples of 46 shares. The DreamFolks public offering is offered for listing on both NSE and BSE and DreamFolks tentative IPO date is September 6, 2022.

The issue is entirely an offer for sale (OFS) of up to 1,72,42,368 shares with a nominal value of Rs 2 each by its promoters Liberatha Peter Kallat, Mukesh Yadav and Dinesh Nagpal.

DreamFolks Services IPO: Valuation

In terms of valuations, post-issue P/E stands at 104.8x FY22 EPS (at the upper end of the issue price range). However, the multiple looks higher primarily due to lower profitability caused by pandemic-related issues, Angel One said.

DreamFolks Services IPO: GMP Today

According to market watchers, after a strong response from retail investors to the public offering, the gray market premium (GMP) of DreamFolks IPO rose from Rs 60 to Rs 83 in a single day. They said that for the past two days, the secondary market mood has remained positive and has also influenced the gray market. However, stock investors have said that GMP is not an ideal indicator of a public offering’s listing premium because it has nothing to do with company finances.

IPO of DreamFolks Services: should you subscribe?

Anand Rathi Securities giving it a long-term underwriting rating, said the company’s unique business proposition (company-client) and ambitious branding bode well for the company in the long run. Plus, it was the first step into space, gives the company an extra edge, and puts it in an ideal location.

ICICI Securities said the company’s valuation based on FY22 looks stretched, but the full recovery of business will be visible from FY23.

“Given that the company has over 95% market share in card-based lounge access with its asset-light business model and the monopolistic nature of the business and the potential for further growth in the card travel segment airline and credit cards, the brokerage firm recommends ‘SUBSCRIBE’ rating on the matter of listing earnings,” he said in a note.

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