Dreamfolks Services Ltd IPO - 7 things to know
Dreamfolks Services Ltd, an airport services aggregator platform, had filed its draft red herring prospectus (DRHP) on 21st January 2022 and it is waiting for SEBI to give its observations and approval for the IPO.
Normally, the IPOs are approved by SEBI within a period of 2 to 3 months unless there are other queries or clarifications that the regulator has. The Dreamfolks Services Ltd IPO will entirely be an offer for sale only.
However, the next steps will be for the company to finalize on its issue date and issue price so that it can start the IPO process, but that would happen only after the IPO approval is received.
7 important things to know about the Dreamfolks Services Ltd IPO
1) Dreamfolks Services Ltd IPO will open 24TH August and close on 26th August. The IPO comprises entirely of an offer for sale of 1.72 crores equity. The price band is fixed at ₹308 to ₹326 per share and lot size is set at 46 shares per lot. The tentative listing date is set for 6th September, 2022 and the tentative allotment date is set for 1st September, 2022.
2) Let us talk about the offer for sale (OFS) portion of the IPO first. The entire issue of Dreamfolks Services Ltd will be by way of an offer for sale only and there is no fresh issue component in this issue. The OFS component will not result in any fresh fund infusion or dilution of the capital or the EPS.
However, the selling of stake by the promoter will increase the free float of the company and facilitate listing of the stock. A total of 1.72 crores equity shares will be sold by way of the OFS. The dilution of the stake will be done by the promoters of the company viz. Liberatha Peter Kallat, Dinesh Nagpal and Mukesh Yadav.
The public issue comprises nearly 33% of the total post-offer paid up capital of the company, so there is going to be substantial dilution of promoter stake.
3) There will be no fresh issue portion in this issue and the entire issue size will be an offer for sale only. The industry that the company currently operates in, is not too capital intensive or even cash burning. It operates on a kind of assured margins with low working capital needs.
Since there is no fresh issue component in the IPO, there will be no fresh funds coming into the company nor will there be any dilution of the capital size or any dilution of the EPS of the company.
4) Dreamfolks facilitates an enhanced airport experience for passengers, leveraging its technology-driven platform. It actually acts as an agnostic platform to integrate a number of airport related services into one common gateway.
Despite a number of variables interacting in the back-end, the customer just sees one front-end to take care of all airport related needs.
5) Dreamfolks Services Ltd has adopted an extremely asset-light business model. This allows them to maintain solid ROE for the shareholders at the same time giving them the ability to scale up the business quickly and with minimal incremental investments.
Dreamfolks essentially integrates global card networks operating in India, credit card and debit card issuers as well as other corporate clients as well as partner airline companies, with various airport lounge operators and other airport related services. It is possible for travellers to book such services from a single front end enhancing the simplicity of their interface.
6) Just to illustrate, Dreamfolks facilitates traveller access to a plethora of airport related services. These include personal and business services like lounges food & beverages, spa services, airport transfer, transit hotels, nap room access, lounge access and baggage transfer services. In short, Dreamfolks take care of the complete end-to-end airport experience.
7) The IPO of Dreamfolks Services Ltd will be lead managed by Equirus Capital and Motilal Oswal Investment Advisors. They will act as the book running lead managers or BRLMs to the issue. The stock is proposed to be listed on the BSE and also on the NSE.
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