DAM Capital Advisors IPO: Check offer size, price band, strengths and weaknesses ahead of December 19 launch

Investment bank DAM Capital Advisors Ltd will launch its initial public offering (IPO) this week on Thursday, December 19.

The company aims to raise ₹840.25 crore through the IPO. The mainboard issue comprises only an offer-for-sale (OFS) component of 2.97 crore equity shares, with no fresh issuance.

The company on Monday announced the price band of the issue at ₹269-283 per share.

The net proceeds from the issue will be received only by the promoter selling the stake after deducting the offer expenses and the applicable taxes. The company will not receive anything from the IPO proceeds.

The IPO will close for subscription on December 23, Monday, and DAM Capital shares will be listed on both BSE and the National stock Exchange of India (NSE) on December 27.

Business Model

DAM Capital is a SEBI-registered merchant banker and research analyst. It provides a wide range of financial solutions in areas of merchant banking comprising equity capital markets, mergers and acquisitions, private equity, and structured finance advisory; and institutional equities comprising broking and research.

The company has a market share of 12.1%, based on the number of initial public offerings (IPOs) and qualified institutional placements undertaken by it as the book-running lead manager in fiscal 2024, according to Crisil report.

The promoters of the company are Dharmesh Anil Mehta, Sonali Dharmesh Mehta and Boombucket Advisors Pvt. Ltd.

Here’s a look at the strengths, weaknesses and key financials of the company ahead of the IPO opening for subscription.

Strengths

• DAM Capital is the fastest-growing merchant bank in India in terms of revenue CAGR (compound annual growth rate) from fiscal 2022 to fiscal 2024. The company also reported the highest profit margin in fiscal 2024, among the major peers.
• The company boasts of long-standing relationships with institutional investors, financial sponsors, corporates and family offices as a result of its experienced team and consistent coverage of clients, many of whom have provided it with repeat business.

Weaknesses

• DAM Capital operates in a highly regulated environment which is subject to changes in laws, regulations and government policies.
• DAM Capital is required to maintain various licences and permits for its business from time to time. Any failure or delay in obtaining or renewing licences may adversely affect its business, financial condition and results of operations.
• 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 on its business.
• DAM Capital has incurred losses in the stock broking segment in the past. Any further reduction in its brokerage fee could have a material adverse effect on cash flows of operations.

Competition

DAM Capital competes, directly or indirectly, with hundreds of companies operating in the financial services industry including merchant banking firms, broking firms, and financial advisory firms. These include Axis Capital Ltd, ICICI Securities Ltd, JM Financial Ltd, Motilal Oswal Financial Services Ltd, Ambit Pvt. Ltd, Equirus, Avendus, Elara Capital, Sirius Advisors, Xylem Investments and Pareto Capital, among others.

Financials