Dreamfolks Services Limited IPO
Business Model of Dreamfolks
1. Mr Mukesh Yadav, Mr Dinesh Nagpal, and Ms Liberatha Kallat founded Gurgaon-based DSPL in 2010 to act as a facilitator between domestic airport lounge service providers and credit card partners.
2. The asset-light business model integrates global card networks operating in India (Card Networks), credit card and debit card issuers (Card Issuers) and other corporate clients, in India, including airline companies with various airport lounge operators and other airport related service providers (collectively, the Operators) on a unified technology platform.
3. DSPL’s established position in providing lounge services, backed by strong relationships with card and lounge partners, and a low debt level provide a comfortable financial risk profile.
4. They facilitate access to the following airport related services (i) lounges, (ii) food and beverage (iii) spa, (iv) meet and assist, (v), airport transfer (vi) transit hotels /nap room access, and (vii) baggage transfer, (collectively, the Services).
Its dominance is underpinned by facilitating access to 100% of the 54 lounges currently operational in India, and they also enjoyed a market share of over 95% of all India issued credit card and debit card (Card Based) access to airport lounges in Fiscal 2022.
Clients of Dreamfolks
Currently, they provide services to all the Card Networks operating in India including Visa, Mastercard, Diners/Discover and RuPay, and many of India’s prominent Card Issuers including ICICI Bank Limited, Axis Bank Limited, Kotak Mahindra Bank Limited, HDFC Bank Limited (in respect of debit card lounge program) and SBI Cards and Payment Services Limited.
The first mover advantage in the lounge access aggregator industry in India has enabled company to become a dominant player in the industry with a share of over 80% in the domestic lounge access market in India.
In Fiscal 2022, 61% income comes from Card Networks providers such as Visa, MasterCard etc., 37% income comes from Card issuers such as banks and 1% from Corporate Clients.
Objects of the Dreamfolks Services Limited IPO:
Dreamfolks Services Limited IPO Details:
|Open Date:||Aug 24 2022|
|Close Date:||Aug 26 2022|
|Face Value:||₹ ₹2 Per Equity Share|
|Issue Type:||Book Built Issue|
|Issue Size:||562 Cr.|
|Lot Size:||46 Shares|
|Issue Price:||₹ 308-326 Per Equity Share|
|Listing Date:||Sep 06 2022|
Promoters And Management:
Financials of Dreamfolks Services Limited IPO:
|Particulars (in Cr)||March 22||March 21||March 20|
|Revenue from operations||283||108||367|
|Lounge fee and other service related costs||237||87||299|
|Employee Benefit Expense||16||12||17|
|Profit (Loss) for the period||16||-1||31|
Comparison With Peers:
Recommendation on Dreamfolks Services Limited IPO:
Review and Recommendation of Dreamfolks IPO by IZ team is 4/10
1. Dreamfolks is an asset light model and India’s largest airport service aggregator with 80% market share in domestic lounges. 2. They provide airport related services (i) lounges, (ii) food and beverage (iii) spa, (iv) meet and assist, (v), airport transfer (vi) transit hotels /nap room access, and (vii) baggage transfer. But 99% income comes from lounge services. 3. As of March 31, 2022, Dreamforks had 50 Clients, including Card Networks and other notable Indian Card Issuers. 4. The revenue has not grown over the past three years. The primary explanation may be covid-19, as their operation is entirely dependent on the numbers of airline passengers. 5. According to FY22 data, the Gross Margin of the business is an extraordinarily low 16.5%. 6. The asking P/E ratio exceeds 100x. Looks overvalued. The promoters of this IPO are selling their shares for a capital gain. No money from IPO will go to the company.