Dreamfolks Services Limited is a dominant player and India's largest airport service aggregator platform facilitating an enhanced airport experience to passengers leveraging a technology driven platform. Its 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 (Corporate Clients and along with Card Networks and Card Issuers, the Clients) with various airport lounge operators and other airport related service providers (collectively, the Operators) on a unified technology platform. They facilitate customers of Clients' (Consumers) 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). They are 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. Additionally, in Fiscal 2022 they also accounted for around 68% of the overall lounge access volume in India. Further, as at March 31, 2022 through the partnerships with other service providers, they have a global footprint extending to 1,416 Touch-points in 121 countries across the world out of which, 244 Touch-points are present in India and 1,172 Touch-points overseas. DSL began effective operations in 2013 by facilitating lounge access services for the Consumers of Mastercard and, currently, 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. Over the years, they have transformed from being an airport lounge access aggregator to an end-to-end technology solutions provider for designing and delivering services that enhance the airport experience. Currently, they facilitate Consumers' access to a host of services: from door-step to the airport, within the airport, and again from the airport to the door-step at the destination. The lounge fee contributed a vast majority of the company's revenues from operations during Fiscals 2022, 2021 and 2020, contributing 98.68%, 97.25% and 98.82%, respectively, of the total consolidated revenue from operations. During Fiscal 2022, Fiscal 2021 and Fiscal 2020 the average revenue from lounge fee was 98.55% of the total revenue from operations. As per financial performance, DSL has posted total income/net profits of Rs 367.81 Cr / Rs 31.35 Cr (FY20), Rs 108.11 Cr / Rs (1.21) Cr (FY21) and Rs 283.99 Cr / Rs 16.60 Cr (FY22). So as per last three years data, sales and profit decreased due to pandemic and company is not able to reach pre-covid level yet. They have posted an average EPS of Rs. 3.98 and average RoNW of 30.40% for last three fiscals. Issue is priced at a P/BV of 20.72 as per NAV of 15.73 on 31.03.22. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around 103, which looks aggressively priced, but if we take pre-covid earnings than P/E is around 54. As per RHP, there are no listed peers. On BRLM's front, 2 lead managers are associated with this IPO, and have handled around 11 IPOs in last three fiscals.Equirus Capital Private Limited: This is 8th IPO from this BRLM. From last 7 IPOs, 2 opened below issue price and remaining opened above issue on the day of listing. As of now, 2 are trading below issue price and other are trading above issue price. ( As on 22.08.22)Motilal Oswal Investment Advisors Limited: This is 5th IPO from this BRLM. From last 4 IPOs, 1 opened below issue price and remaining opened above issue on the day of listing. As of now, 1 is trading below issue price and other are trading above issue price. ( As on 22.08.22) As per financials, Dreamfolks Services Limited has shown declining trend due to pandemic, RoNW is 19.78% and P/E is respectively 103 as per FY22 earnings, which looks aggressively priced. Its expected company may cross over pre-pandemic level in near future and in that case P/E will be around 50. Company is in field of airport service aggregator platform with asset light model and is dominant player with nearly 95% market share and also first mover. So except valuations on all parameters company is good and may give very healthy growth for next 3-5 years. Performance of BRLMs are good. So, we give "SUBSCRIBE FOR LONG TERM" rating for this IPO and one may buy it from open market if there is any price correction post listing.
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