The ₹840.25-crore DAM Capital Advisors IPO opens for subscription on December 19, 2024, and closes on December 23, 2024. The IPO is entirely an offer-for-sale (OFS) of 2.97 crore equity shares, meaning the company will not receive any proceeds from the sale.
- Price Band: ₹269-₹283 per share.
- Listing Date: Expected on December 27, 2024, on BSE and NSE.
- GMP: ₹135 per share, indicating a 47.7% premium over the upper price band in the grey market.
Business Overview
DAM Capital Advisors is a leading merchant bank in India with operations in merchant banking, institutional equities, and broking activities.
- Revenue Mix (H1 FY24):
- Merchant banking fees: 54.1%.
- Broking activities: 39.5%.
- Market Share: Held a 12.1% share of IPOs and QIPs managed as a lead manager in FY24.
Financial Highlights
- FY24 Revenue: ₹182 crore.
- FY24 Net Profit: ₹70.52 crore.
- FY24 EPS: ₹10.
Analyst Recommendations
Choice Broking
- P/E Valuation: At the higher price band, the P/E ratio is 28.4x, which is above the industry average.
- Recommendation: Subscribe for Long Term due to growth potential from India’s expanding capital markets and increased investor participation.
Bajaj Broking
- Growth Drivers: Strong market position, diverse client base, and robust financials.
- Recommendation: Subscribe for Long Term, citing a valuation of approximately ₹2,000 crore and solid growth prospects.
Anand Rathi
- Strategic Initiatives: Plans to expand fee-based services and form global partnerships for cross-border transactions.
- Recommendation: Subscribe for Long Term as the company is well-positioned to benefit from India’s growing capital market opportunities.
GMP and Market Sentiment
The grey market premium (GMP) of ₹135 per share reflects strong demand for DAM Capital Advisors shares, suggesting a premium listing on its debut.
- Grey Market Price: ₹418 per share.
- Premium: 47.7% above the upper price band.
Strengths
- Strong Market Position:
DAM Capital is a prominent player in India’s capital markets, handling a significant share of IPOs and QIPs. - Robust Financials:
Consistent revenue and profit growth underline the company’s financial stability. - Favorable Industry Trends:
India’s capital market growth, fueled by rising investor participation, provides ample opportunities for expansion. - Strategic Expansion:
Entry into additional fee-based businesses and global partnerships will drive long-term growth.
Risks
- Valuation Concerns:
The P/E ratio of 28.4x is on the higher side compared to industry peers. - Entirely an OFS:
Proceeds will go to selling shareholders, and the company won’t benefit directly from the IPO. - Market Dependency:
Revenue depends heavily on capital market activity, which is sensitive to economic cycles.
FAQs
1. What is the price band for DAM Capital Advisors IPO?
The price band is set at ₹269-₹283 per share.
2. What is the minimum investment required?
Investors need to apply for a minimum of 53 shares, amounting to approximately ₹15,019 at the upper price band.
3. Is the IPO suitable for short-term investors?
The strong GMP suggests potential listing gains, but analysts primarily recommend the IPO for long-term investors.
4. How will the company use IPO proceeds?
Since the IPO is entirely an offer-for-sale, the company will not receive any proceeds.
5. What are the growth prospects for DAM Capital Advisors?
Favorable industry trends, expansion into fee-based businesses, and global partnerships are expected to drive long-term growth.
6. What is the GMP for DAM Capital Advisors IPO?
The grey market premium (GMP) is ₹135, reflecting a 47.7% premium over the upper price band.
7. When will DAM Capital Advisors list on the stock exchanges?
The shares are expected to list on December 27, 2024, on BSE and NSE.
8. How does DAM Capital Advisors compare to peers?
The company is valued higher than peers but offers robust financials and a strong market position, making it attractive for long-term investment.
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