DAM Capital Advisors IPO: From financials to key risks – Here are 10 key things to know from RHP | Stock Market News

DAM Capital Advisors IPO: The initial public offer (IPO) of DAM Capital Advisors will open for subscription on Thursday, December 19, and close on Monday, December 21.

DAM Capital Advisors IPO, valued at ₹840.25 crore, is entirely an offer for sale (OFS) of 2.97 shares by the investors and promoters of the company. The IPO price band has been fixed at ₹269 to ₹283 per share.

Retail investors can apply for a minimum of 53 shares in one lot and its multiples thereafter. At the upper price band of the IPO, the minimum investment requirement by retail investors is ₹14,999. Overall, 50% of the DAM Capital IPO is reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors, and 35% for retail investors.

Nuvama Wealth Management is the book-running lead manager of the issue, while Link Intime India is acting as the registrar of the IPO.

10 Key Things About DAM Capital Advisors IPO

Here are the key things investors must know about DAM Capital Advisors IPO before subscribing to the issue:

Company Overview: DAM Capital is India’s fastest-growing merchant banker in terms of revenue. The company offers a wide range of financial solutions in areas of merchant banking, comprising equity capital markets, mergers and acquisitions, private equity, and structured finance advisory, as well as institutional equities, including broking and research. According to a CRISIL report, the company had the highest profit margin in the financial year 2023-2024 (FY24) among its peers. As of FY24, it had a market share of 12.1% based on the number of IPO offerings and qualified institutional placements (QIPs) undertaken by the company as a book-running lead manager.

Financial Snapshot: The company has posted impressive growth over the past few years, with total income reaching ₹1,820 million in FY24 from ₹945.08 million in FY22, representing a compound annual growth rate (CAGR) of 38.77% during the same period. Profit after tax (PAT) also saw a remarkable increase to ₹705.23 million, reflecting a strong CAGR of 79.46% between FY22 and FY24.

Peers of the Company: ICICI Securities, IIFL Capital, JM Financial, and Motilal Oswal Financial Services are the listed peers of DAM Capital. DAM Capital has a price-to-earnings ratio of 28.35x, ICICI Securities of 16.96x, and IIFL Capital of 20.56x. Meanwhile, the PE ratios of JM Financial and Motilal Oswal Financial Services stand at 32.66x and 23.57x, respectively.

Major Shareholders: As of the date of the RHP, the company had seven shareholders who owned 100% of the pre-offer share capital. These include Dharmesh Anil Mehta, Multiples Alternate Asset Management, Narotam Satyanarayan Sekhsaria, Boombucket Advisors, RBL Bank, Easyaccess Financial Services, and Sonali Dharmesh.

Key IPO Dates: The issue will open for subscription on Thursday, December 19, and close on Monday, December 23. The bidding for anchor investors will open on Wednesday, December 18. The listing will likely happen on Friday, December 27.

Company Subsidiaries: The company has a wholly-owned subsidiary in India called DAM Asset Management, which was incorporated on July 8, 2024. The subsidiary plans to offer asset management and investment advisory services to various clients. However, it is not yet operational.

The company also has a wholly-owned subsidiary in the USA, DAM Capital (USA), Inc. This subsidiary is a registered broker-dealer with the US Securities and Exchange Commission (SEC). Another wholly-owned subsidiary, IDFC Securities Singapore Pte. Ltd. (IDFCSS), was incorporated in Singapore but was dissolved and liquidated on November 16, 2021.

Key Risks: The company operates in a highly regulated environment, which is subject to changes in laws, regulations, and government policies. Further, the company is required to maintain various licences and permits for its business from time to time. Any failure or delay in obtaining or renewing licences or permits, or non-compliance with changing laws, may adversely affect the business. Its merchant banking and institutional equities business is highly dependent on market and economic conditions. Adverse market or economic conditions could have a significant economic and financial impact.

A significant portion of the company’s revenue is from only two income streams, namely, advisory fee income and brokerage, which are highly dependent on general macroeconomic conditions, and their continued success is necessary for its business prospects.

Key Strengths: The company is the fastest-growing merchant bank in India and has a proven execution record with an in-depth understanding of sectors and products. It has extensive coverage of corporates, financial sponsors, and institutional investors, with repeat business. Lastly, the company is backed by experienced management and professionals.

IPO Objective: Since the IPO is entirely an OFS, the company will not receive any funds from the share sale. The IPO will provide promoters and selling shareholders with an exit route.

Shareholders Offloading Stake via IPO: Multiples Alternate Asset Management Private Limited, an investor-selling shareholder, is offering up to 8,714,400 equity shares. Narotam Satyanarayan Sekhsaria, another investor-selling shareholder, is offering up to 7,042,400 equity shares. RBL Bank Limited, also an investor-selling shareholder, is offering up to 5,771,000 equity shares. Easyaccess Financial Services Limited, an investor-selling shareholder, is offering up to 5,064,250 equity shares. Dharmesh Anil Mehta, a promoter-selling shareholder, is offering up to 3,098,850 equity shares.

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.