Dreamfolks Services shares hit record low, down 49% from IPO price; what should investors do?

Shares of Dreamfolks Services Ltd slipped to their record low on Wednesday amid Motilal Oswal Mutual Fund and Bajaj Finance Ltd selling stake in the company on July 4. On Friday, Bajaj Finance sold 3.09 lakh shares worth Rs 61 crore at an average price of Rs 196.32 apiece. Motilal Oswal Mutual Fund offloaded 2.7 lakh shares worth Rs 57 crore at an average price of Rs 211.14. HRTI Private also offloaded 2.61 lakh shares worth Rs 51 crore.

Dreamfolks Services is India's leading airport and travel services aggregator. 

The stock slipped 6% to a record low of Rs 166.40 on BSE. At the current level, the stock has lost 68% from its 52 week high of Rs 522 reached on September 6, 2024. It is down 49% from its IPO price of Rs 326. The IPO of the firm was open from August 24 to August 26, 2022. 

Market cap of the firm slipped to Rs 895.47 crore on BSE. The stock opened lower at Rs 175.70. Total 2.53 lakh shares of Dreamfolks Services changed hands amounting to a turnover of Rs 4.27 crore on BSE. The stock has lost 57.71% this year and fallen 65.15% in a year. In terms of technicals, the relative strength index (RSI) of Dreamfolks Services stands at 19.7, signaling it's trading in the oversold territory. 

Dreamfolks Services shares have a beta of 0.87, indicating very low volatility in a year.   

Dreamfolks Services shares are trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.   

Jigar S Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers said, "Support will be at Rs 165 and resistance at Rs 185. A decisive move above the Rs 185 level may trigger a further upside of Rs 190. The expected trading range will be between Rs 160 and Rs 190 in the short-term."

Osho Krishan, Chief Manager of Technical and Derivative Research at Angel One said, "Dream Folks is currently undergoing a sustained downtrend, hovering at lifetime low levels. The technical indicators reflect a troubling condition, with the majority suggesting a significant disruption in performance. There are no indications of a recovery, and the persistent sell-off contributes to a markedly bearish outlook, characterized by a lack of clear support levels. Conversely, initial resistance is identified within the range of Rs 200 to Rs 210 from a short-term perspective."

Drumil Vithlani, Technical Research Analyst at Bonanza Portfolio said, "Dreamfolks Services is currently trading at an all-time low and has recently witnessed a breakdown from a rounding top pattern, indicating distribution at higher levels and a clear shift in sentiment. The breakdown is accompanied by rising volume, adding confirmation to the bearish setup. From a technical standpoint, the stock is deeply oversold, suggesting that while downside momentum is strong, a short-term bounce cannot be ruled out. However, the broader trend remains negative as long as the price stays below Rs 175. Any rebound should be viewed as a selling opportunity, with potential downside targets placed at Rs 160 and lower in the near term. Caution is advised, and traders should refrain from initiating new long positions until a strong reversal signal emerges."

A R Ramachandran, SEBI registered Independent analyst says, "Dreamfolks stock price is bearish but also very oversold on the Daily charts with next support at  Rs 160. Investors should be buying only if Daily close is above the resistance of Rs 183 for a target of Rs 206 in the near term."

The stock has seen pressure ever since Adani Airports CEO, in a post on LinkedIn, said that lounge access on airports no longer requires middlemen and can be done directly through airport operators.

In June, reports said major Indian banks and card networks, including ICICI Bank, Axis Bank, and Mastercard, were planning to move away from aggregator DreamFolks Services Ltd to establish direct partnerships with airport lounge operators, and others also may follow suit.

Dreamfolks Services is India's largest airport service aggregator platform facilitating an enhanced airport experience to passengers leveraging a technology-driven platform.