DAM Capital Advisors IPO Fully Subscribed: Should You Invest in the Rs 840 Crore Issue?

The initial public offering (IPO) of DAM Capital Advisors opened for subscription today. The price band has been fixed at Rs 269-283 per share and a lot size of 53 shares. The investors can bid for a minimum of 53 shares and in multiples thereof.

The IPO will be available for public subscription from December 19 to December 23. On Wednesday, the company secured Rs 251 crore from anchor investor, just one day prior to the start of its initial share sale for public subscription.

Following the closure of subscription window, the basis of allotment of DAM Capital Advisors IPO shares is likely to be finalized to Tuesday, December 24, 2024. The company is expected to get listed at NSE and BSE on Friday, December 27, 2024.

Retail investors would require a minimum investment of Rs 14,999 to bid for one lot or shares of DAM Capital Advisors. They can bid for a maximum of 13 lots or 689 shares, amounting to Rs 1,94,987.

With the public issue, DAM Capital Advisors aims to raise Rs 840.25 crore, which is an entirely offer-for-sale of 2.96 crore equity shares with a face value of Rs 2 per share. From the promoters, Dharmesh Anil Mehta is offloading 30,98,850 equity shares, while the rest are being divested by investors, including Multiples Alternate Asset Management, Narotam Satyanarayan Sekhsaria, RBL Bank, and Easyaccess Financial Services.

According to the red herring prospectus, the company will not receive any proceeds from the offer for sale from the selling shareholders. Each selling shareholder will be entitled to their respective proportion of the proceeds of the offer-for-sale after deducting their portion of the offer-related expenses and the relevant taxes thereon.

Nuvama Wealth Management is the solo book-running lead manager of the public offering. Link Intime India serves as the registrar of the public offering of shares.

DAM Capital Advisors IPO Subscription Rate

DAM Capital Advisors IPO was fully subscribed on the first day of opening. The issue was subscribed 1.29 times as of 01:09 PM on Thursday, according to NSE data. The non-institutional investors (NIIs) portion was booked 1.31 times, retail investors quota was subscribed 2 times and the employees portion was subscribed 2.82 times. However, the issue did not receive much response from qualified institutional buyers (QIBs).

DAM Capital Advisors IPO GMP

DAM Capital Advisors shares were commanding a premium of Rs 148 in the grey market on Thursday, according to investorgain.com.

Given the upper end of the IPO price band and the current GMP, the estimated listing price of DAM Capital Advisors share price is indicated at Rs 431 per share, which is 52.3 per cent higher than the IPO price of Rs 283.

Should you invest in DAM Capital Advisors IPO?

Anand Rathi – Subscribe for Long Term

Analysts at Anand Rathi recommended investors subscribe to the issue from a long-term perspective.

“On valuation parse at the upper band of Rs 283, the issue is asking for a Market Cap of Rs 20000 Million. Based on annualized earnings, the company is asking a PE of 22.8x times for FY 2025 which is fully priced,” the brokerage firm said.

Therefore, the analysts believe that the company is well-placed to leverage the growing capital market opportunities in India. As part of its growth strategy, the company plans to enter additional fee-based businesses to capitalize on emerging market trends.

“Additionally, a strategic partnership with a global merchant bank will strengthen its ability to handle cross-border transactions and broaden its international presence,” it added.

Bajaj Broking - Subscribe for long term

Bajaj Broking Research, in its IPO note, said that the company has a promising outlook, driven by its strong market position, diverse client base and robust financial performance.

The company's strategic focus on expanding its investment banking services, private equity, and structured finance solutions positions it well to capitalize on growing market opportunities. Additionally, their commitment to technological advancements and international market expansion further enhances their growth prospects, the brokerage firm said.

Mehta Equities - Subscribe for listing gains

Rajan Shinde, research analyst at Mehta Equities believes DAM Capital presents a promising investment opportunity, offering exposure to one of India’s leading and rapidly growing merchant banks.

“With a market share of 12.1 per cent in IPOs and QIPs in FY 2024, up from 8.2 per cent in FY 2021, the company has shown strong leadership and adaptability in specialized financial products like buybacks, delisting, and open offers. Its robust institutional equities platform spans key global markets, offering comprehensive research and seamless execution,” he added.

Financially, DAM Capital has demonstrated a remarkable turnaround, with revenues up 112% in FY 2024 and a 713% jump in net profit. However, the 100 per cent OFS issue raises concerns for new investors.

“Despite this, the company’s strong client relationships and focus on emerging investment trends position it well for future growth. We recommend subscribing to the IPO for listing gains," Shinde said.

About the company

Founded by Dharmesh Anil Mehta, DAM Capital Advisors Ltd offers a wide range of financial services specializing in merchant banking which includes equity capital markets, mergers and acquisitions (M&A), private equity and structured finance advisory. It also has an institutional equities division that focuses on broking and research.

DAM Capital holds a market share of 12.1 per cent in managing IPOs and qualified institutional placements (QIPs). The company’s client base consists of 263 active clients, including registered foreign portfolio investors from various global regions such as the USA, UK, Europe, Hong Kong, Singapore, Australia, Taiwan, South Korea, the Middle East, and South Africa.

In FY24, the company reported a total income of Rs 182 crore, a significant rise from Rs 85 crore in the previous fiscal. Its net profit surged to Rs 70.52 crore in FY24 from Rs 8.67 crore in FY23.

(Disclaimer: The views expressed by the spokespersons in this article are their own and do not constitute financial advice.)

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