The Rs 840.25 crore-IPO of DAM Capital Advisors opens for bidding on Thursday, December 19 and can be subscribed until Monday, December 23. The company is offering its shares in the range of Rs 269-283 apiece and application can be made for a minimum of 53 equity shares and its multiples thereafter.
The IPO of DAM Capital Advisors is entirely an offer-for-sale (OFS) of up to 2,96,90,900 equity shares. It raised Rs 251.48 crore via anchor investors by allocating 88.86 lakh shares at a price of Rs 283 apiece. Its anchor book included names like Nomura, Goldman Sachs, HSBC Global, Carmignac Portfolio, Neuberger Berman Investment Funds, Societe Generale and more.
Mumbai-based DAM Capital Advisors is an investment bank in India. It offers a wide range of financial solutions in the areas of investment banking comprising and institutional equities comprising broking and research. The company will not receive any proceeds from the issue.
The company has successfully executed 72 ECM transactions comprising 27 IPOs, 16 qualified institutions placements, 6 offers for sale, 6 preferential issues, 4 rights issues, 8 buybacks, 4 open offers and 1 initial public offer of units by a real estate investment trust. The company has provided services to 263 active clients.
Nuvama Wealth Management sole is the book running lead manager of the DAM Capital Advisors IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed at both BSE and NSE on Friday, December 27. Here's what a host of brokerage said about the IPO of DAM Capital Advisors:
Brokerage firms are mostly positive on the issue and suggest subscribing to it for a long term citing the growth of Indian financial markets, diversified product offering, and strong financials. However, aggressive valuations, highly regulated environment, dependence on market condition and complete OFS nature of issue are the key concerns for the company.
DAM Capital Advisors is well-positioned to capitalize on the growing market opportunities in India. As a part of their growth strategy, the company plans to venture into complementary fee-based businesses. This will help them to tap into the growing markets, said Arihant Capital Markets.
"Strategic tie-ups with a global merchant bank will enhance their cross-border transaction capabilities and expand their global reach. At the upper band price, the issue is valued at 10.15 times P/Bv based on Q2FY25 net worth. We recommend 'subscribe for long term' to the issue," it said.
DAM Capital Advisors is one of the leading merchant banks in India and provides services across the Merchant banking and Institutional Equity domains. It has showcased remarkable financial performance over the years with revenue, Ebitda and PAT growing at a CAGR of 38.9 per cent, 76.7 per cent and 79.5 per cent, respectively over the FY22-FY24 period, said SBI Securities.
"It had the highest net profit margin among peers as of FY24. The domestic broking industry is expected to grow at a CAGR of 16-18 per cent from FY24- FY29, which shall augur well for the company’s growth. We recommend investors to subscribe to the issue at a cut-off price for the long term," it said.
DAM Capital has experienced strong growth in FY24 compared to FY23, with the number of issues rising from 234 in FY23 to 316 in FY24. It has also positively reflected in the company’s top and bottom line, said Choice Broking. "However, the high valuation being demanded raises concerns. Thus, we recommend an 'subscribe for long term' rating for this issue," it said.
The issue is valued at a price-to-earnings (P/E) ratio of 28.4 times on the upper price band based on FY24 earnings, which is relatively expensive compared to its peers, said StoxBox. "However, considering the company’s improving financials, its rapidly growing merchant banking business, and favourable industry trends, we recommend a 'subscribe' rating for the issue," it said.