Highlights
| Issue Size –: 2,96,90,900 shares | Issue Open/Close – 19 Dec / 23 Dec, 2024 |
| Price Band (Rs.) 269 – 283 | Issue Size (Rs.) – 8,402 mn |
| Face Value (Rs) 2 | Lot Size (shares) 53 |
DAM Capital Advisors Limited (DCAL) incorporated on 1993, provide a wide range of financial solutions in areas of (i) merchant banking comprising equity capital markets (ECM), mergers and acquisitions (M&A), private equity (PE), and structured finance advisory; and (ii) institutional equities comprising broking and research.
They are one of the leading merchant banks in India with a market share of 12.1 pct, based on the number of initial public offerings and qualified institutional placements undertaken by them as the book running lead manager, in FY24.
They leverage their deep domain knowledge across sectors and products combined with vast
experience of their team to provide strategic advisory and capital markets solutions to their diverse and marquee clientele including corporates, financial sponsors, institutional investors and family offices.
From the date of the Acquisition i.e., November 7, 2019 till October 31, 2024, Thet have successfully executed 72 ECM transactions comprising 27 IPOs, 16 qualified institutions placements (QIPs), 6 offer for sale (OFS), 6 preferential issues, 4 rights issues, 8 buybacks, 4 open offers and 1 initial public offer of units by a real estate investment trust (REIT).
Out of the total proceeds of Rs. 8,402 mn, Entire Rs. 8,408 would go towards existing selling shareholders of the company and company will not receive any amount form the issue proceedings.
Key Highlights
- The market capitalization of National Stock Exchange grew at 14.4 pct CAGR during FY11 to FY24. The Indian capital market has shown a strong growth in FY24 compared to FY23 in terms of the number of issues (IPO, QIP, OFS, Rights Issue, Buyback, InvIT/REIT, FPO) which have increased from 234 in FY23 to 316 in FY24. In FY25, the number of issues stand at 215 as of October 2024.
- DCAL understanding and expertise across sectors and products enable them to identify niche sub-sectors and product opportunities early. Early market insights enable them to pitch appropriate products to clients. Further, their deep sector understanding allows them to identify unique stories which they are able to bring to the market.
- One of their key strengths is to facilitate investor interactions and liaise between corporates and investors through conferences, roadshows and expert calls. They have organized events and conferences in emerging sectors such as data centres, semiconductors and smart meters.
- To further strengthen their market position, DCAL will add new products to existing portfolio such as InvITs, offshore listings, venture capital fundraising, cross-border M&A and debt capital markets, ensuring that they remain at the forefront of industry trends.
- The company aims to penetrate deeper with their existing clients and grow their market share among large investors by providing enhanced value through research, identifying and capturing white spaces in the coverage universe of peers, and delivering tailored insights.
- DCAL key growth strategies includes (i) Strengthen their competitive position in existing lines of business (ii) Enhance their merchant banking platform (iii) Further strengthen the institutional equities platform (iv) Build other complementary fee-based businesses (v) Explore potential strategic tie-up with a global merchant bank for cross-border transactions (vi) Strengthen talent pool by adding highly qualified and motivated professionals.
- Sales of the company has grown by 38.8 pct CAGR over FY22-24 while Profit grew 79.4 pct CAGR over same Year. In FY24 the company reported sales of Rs. 1,820 mn which grew 114 pct YoY. During FY24 profit of the company jumped 713 pct YoY to Rs. 705 mn. In H1FY25 the company reported Sales/profit of Rs. 1096 mn/ Rs. 438 mn.
Key Risk
- DCAL 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 DCAL business.
- DCAL institutional equities segment comprising of broking and research might get impacted on the implementation of SEBI’s circular on measures to strengthen equity index derivatives framework for increased investor protection and market stability.
Financial Performance
| Particulars | FY22 | FY23 | FY24 | H1FY25 |
| Total Income (Rs. mn) | 945 | 850 | 1820 | 1096 |
| Merchant Banking Sales as a % of Total Income | 64.01% | 60.01% | 67.24% | 54.06% |
| Broking Revenue as a % of Total Income | 32.65% | 35.75% | 28.27% | 39.47% |
| Profit (Rs. mn) | 219 | 87 | 705 | 438 |
| Profit Margin % | 23.17% | 10.20% | 38.75% | 39.95% |
| Return on Equity % | 28.53% | 9.47% | 54.72% | 23.98% |
| Capital Market Issuances | 12 | 13 | 21 | 6 |
| Number of Stocks Covered by Research | 128 | 153 | 168 | 162 |
| Number of Sectors Covered by Research | 19 | 20 | 19 | 20 |
Valuation
DAM Capital Advisors Limited (DCAL) is the fastest growing investment bank and one of the leading investment banks in India with a market share of 12.1 pct based on the number of initial public offerings and qualified institutional placements undertaken by them as the book running lead manager in FY24. At the upper end of the price of Rs. 283, the issue quotes at PE of ~22.8x based on FY25E annualized earnings. The issue looks fully priced. One can apply for listing gains.
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