DAM Capital Advisors IPO

DAM Capital Advisors IPO Details

DAM Capital Advisors IPO Date

The DAM Capital Advisors IPO will open for subscription on December 19, 2024, and the closing date for the IPO is December 23, 2024, according to the offer document filed by the company with SEBI. After this, investors are expected to be updated about the allotment status on Tuesday, December 24, 2024.

Investors who have been allotted shares can expect them to be credited to their demat account on December 26, 2024. The shares will tentatively be listed on the NSE and the BSE on Friday, December 27, 2024.

DAM Capital Advisors IPO Price Band

The IPO is entirely offer-for-sale (OFS). The IPO price band has been set between ₹269 and ₹283. Interested investors can choose a price within this band to apply for the IPO. 

The IPO is a book-building issue of ₹840.25 crore, with an offer for sale of 2.97 crore shares of face value ₹2 each (totalling ₹₹840.25 crore). 

The DAM Capital Advisors IPO listing price will be tentatively determined on December 27, 2024. The listing price is the price at which a company’s shares debut on the stock exchanges.

DAM Capital Advisors IPO Lot Size

The DAM Capital Advisors IPO details have not yet been declared. The minimum lot size for an application is 53 shares, and thereafter, it is in multiples of 53 shares. Meanwhile, the IPO issue size is approximately ₹840.25 crore. 

DAM Capital Advisors IPO Objective

Net proceeds from the IPO will go to the selling shareholders, and the company will not receive any proceeds from this public issue. Further, the company wants to achieve the benefits of listing its shares on the stock exchanges and enhance its visibility and brand image.  

About DAM Capital Advisors

DAM Capital Advisors is a SEBI-registered merchant banker and research analyst firm. The company offers various financial services related to capital markets, including merchant banking, mergers and acquisitions, private equity, structured finance advisory, and institutional equities, including broking and research.

The company was originally incorporated in 1993 as “S.S. Kantilal Ishwarlal Sharebrokers and Investors Private Limited.” In 2006, it was acquired by the Infrastructure Development Finance Company (IDFC). In 2019, the company’s current promotor, Dharmesh Anil Mehta and other investors acquired the entire stake from IDFC and rebranded the company to DAM Capital Advisors Limited in July 2020. 

According to the company, it had a 12.1% market share in FY24 as a book-running lead manager based on the number of IPOs and QIPs undertaken. After acquiring a stake from IDFC, the company successfully executed 27 IPOs, 16 QIPs, six OFS and preferential issues, four rights issues, eight buybacks, and various other market transactions between November 2019 to October 31, 2024.

In the last three fiscal years, the company has helped its clients raise over ₹25,648 crore via IPOs and ₹10,534 crore via QIPs. The company earns most of its revenue from fees and commission income, with the merchant banking business making up over 67% of overall revenue in FY24, while the broking business contributes the rest. As of October 31, 2024, the company has 121 employees across all its verticals. 

As of October 31, 2024, the company had 263 active clients under its institutional equities business, including registered FPIs spread across geographies such as India, the USA, the UK, Europe, Hong Kong, and Singapore. The company has also done 23 advisory transactions, including M&A advisory, private equity advisory and others. 

Between FY22 and FY24, the company's revenue from operations rose at a CAGR of 38.86%, while net profit rose 79.46% during the same period. Meanwhile, the domestic capital market has shown strong growth in recent years, with a total of 316 issues (IPO, QIP, OFS, rights issue) compared to 234 in FY23. In FY25, the number of issues stood at 215 as of October 2024, while the market capitalisation of the National Stock Exchange (NSE) grew at a 14.4% CAGR from FY11 to FY24. DAM Capital Advisors is strategically positioned itself to leverage from India’s growth story.

Now, DAM Capital Advisors is launching its initial public offer (IPO). The total IPO issue size is ₹840.25 crores, and it is a complete offer for sale. Its shares will be listed on the NSE and BSE.

Company Name: DAM Capital Advisors Limited

Company Established On: May 7, 1993

Company Type: Public Limited Company

Managing Director & CEO: Dharmesh Anil Mehta

Financial snapshot

DAM Capital Advisors IPO Analysis

Strengths and Opportunities

1. It is the fastest-growing merchant bank in India by revenue CAGR from FY22 to FY24, and it recorded the highest profit margin amongst its peers in FY24.
2. With 40 employees in its merchant banking team, 9 of whom have more than 18 years of experience, the company has cultivated understanding and expertise across sectors and products. 
3. In FY24, the company earned ₹1.64 crore as revenue per employee, which rose 59% compared to ₹1.02 crore earned in FY22.
4. Employee cost as a percentage (%) of total income stood at 35.90% in FY24.
5. Its institutional equities vertical is defined by comprehensive research, experienced sales, and sales trading teams, which service a clientele across investor categories.
6. The company has developed long-standing relationships with institutional investors, financial sponsors, corporates, and family offices, as well as recurring clientele.
7. The company is backed by a majority independent board comprising 4 independent directors (1 independent chairperson), 1 non-executive director and 2 executive directors.

Risks and Threats

1. As its merchant banking and institutional equities business is highly dependent on market and economic conditions, any adverse market or economic condition will impact it.
2. Its wholly owned subsidiary, DAM USA, is subject to regular inspection and oversight by the US’s Financial Industry Regulatory Authority (FINRA) and SEC.
3. The company incurred losses of ₹11.66 crore and ₹14.78 crore in the stock broking segment in FY22 and FY23, respectively.
4. A significant portion of its revenue comes from two income streams, advisory fee income and brokerage, which are highly dependent on general macroeconomic conditions. 
5. The company had negative cash flow from operating activities in FY24 due to a decrease in trade payables due to payment towards an unsettled exchange obligation. It may continue to have negative cash flow in the future.
6. There are outstanding litigation proceedings involving the company and one of its directors. The company has registered an FIR regarding a cybersecurity incident in which unauthorised access led to the theft of KYC. 
7. It has delayed making payments of statutory dues and has also paid interest and fees towards such delayed payments. 
8. The company relies on the Indian economy; therefore, any political, economic or other instability may impact its business.
9. Any downgrading of India’s sovereign debt rating by an International rating agency would increase the company’s borrowing costs and impact its access to the global debt capital market. 

How to apply for the DAM Capital Advisors IPO?

If you are interested to invest in DAM Capital Advisors IPO, following are the steps to apply:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘DAM Capital Advisors IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

You can also pre-apply for the DAM Capital Advisors IPO on Upstox which usually begins a day before the IPO opens for subscription.