Airport services aggregator DreamFolks Services IPO to open on August 24, price band at ₹308-₹326 apiece

• The company began operations in 2013 facilitating airport lounge access services and has now become an end-to-end technology solutions provider.
• The ₹500 crore public offering is a complete offer for sale by promoters at a price band of ₹308-₹326 per share.
• Covid-19 has adversely impacted the air travel industry and as a result the airport service provider is still recovering from the pandemic slowdown.

Airport services aggregator platform DreamFolks Services is all set to open its initial public offering (IPO) on August 24 and will close on August 26.

The IPO is a complete offer for sale by promoters and will raise ₹560 crore with a price band of ₹308-₹326 per share.

The airport service aggregator began operations in 2013 facilitating airport lounge access services and has now become an end-to-end technology solutions provider. Covid restrictions have severely impacted the airport service provider’s financials however it is now recovering from the lows as the travel industry has picked up and is busy as pre covid.

“The air travel industry has, in the recent past, been buffeted by the COVID-19 pandemic which has adversely impacted our operations. Further, the travel industry is also generally affected by various factors such as increase in the fuel price, government policies applicable, in particular, to the airline industry, failure of airlines etc. Accordingly, any downturn in the travel industry, in general, and in the air travel industry, in particular, could adversely impact our results of operations and our financial condition,” said the company in its red herring prospectus.

According to the directorate general of civil aviation (DGCA), prior to covid in the last five years between 2015-2019 the CAGR for the domestic air travel industry was noted to be 12%. However, due to the onset of covid-19, the Indian aviation market is expected to experience a linear recovery.
Further, the company believes that if the impact of Covid-19 is prolonged or more severe than anticipated it may face a deleterious impact on its business.

The company provides access to various other services such as food and beverage offerings, spa services, ‘meet and assist’, airport transfer services, transit hotels / nap rooms access and baggage transfer.

The global aviation sector that had taken a hit due to the lockdowns is now in the revival phase. ”The Global airlines are planning to resume their long-haul routes, specially driven. This holds good for the Indian domestic market also; it is interesting to note that a few Indian Tier-2 and Tier-3 airports have surpassed the Pre-COVID traffic numbers,” said the company in its RHP.

Currently, it has tie-ups with Visa, Master Card, Diners/Discover and RuPay card networks operating in India. Other key clients include ICICI Bank, Axis Bank, Kotak Mahindra Bank, HDFC Bank (in respect of debit card lounge program), and SBI Cards and Payment Services.

DreamFolks is heavily dependent on the cards that are in circulation and on issuance of new credit cards and debit cards. Out of an estimated 5.2 million passengers using lounges in India, more than 80% passengers use credit cards or debit cards to access domestic lounges.

Further, there are expectations of strong economic recovery resulting in more travel through air routes and airport services. The latest panel of UNWTO (United Nations World Tourism Organization) suggests that the tourism sector is expected to see an increasing growth and make a strong recovery as the economic and COVID situation improves.

Here are some of the important details of the IPO:
Motilal Oswal Investment Advisors Ltd and Equirus Capital Private Ltd are lead managers handling the IPO.

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