Dreamfolks services limited( DFS)

Business overview:
Dreamfolks services limited acts as a service provider between airport lounge operators and credit card providers(banks, card networks). When we go to the airport and access the airport lounge, our credit cards are checked at the entrance of the lounge using a technology platform to assess whether a particular card is eligible for lounge access, number of free access remaining, etc… This simple service is provided by Dreamfolks using their technology platform. Even though lounge access has been provided as a compliment with credit cards to travelers like us, actual cost is borne by card companies/banks. Dreamfolks(DFS) collects the money from card companies per passenger, keeps its revenue share and rest is paid to lounge operators. Other than banks and credit card networks it also has airlines and other corporates as clients to provide services. In addition to lounge access they also provide services like meet and assist, spa, airport transport and baggage transfer etc…

At present the majority of revenue(95%) comes from lounge access service.
Revenue was charged to card networks on a per pax basis that is the number of unique times passengers avail of the services. Present blended rate (domestic +international) of revenue per pax is around Rs 900.00 and DFS share is around Rs.130?.

Company business can be summarized as below:

Salient points:
Dreamfolks is a play on fast growing airline travel and increasing credit/debit card penetration in India.
First mover advantage of starting lounge access service in India and having significant market share.
DFS accounts for around 67% of the overall lounge access volume in India (domestic and international). Indian credit card (CD)/ debit card(DC) are primary modes of access to domestic airport lounges at around 80%. DFS accounts for 95-97% of India issued CD/DC based access to lounges and is successful in bridging the gap between lounge operators and card issuers.

Dreamfolks has tie up with major card networks operating in India like Visa, Mastercard, Diners/Discover, RuPay and prominent banks like ICICI bank, Axis ,Kotak, Hdfc bank(debit card),IDFC first bank and SBI cards and payment services limited. Recently it has added Dhanalaksmi bank to its client list. It also has tie up with many airlines, travel companies and corporates.

DFS has tied up with all lounge operators(18 in number) including market leaders like Premium plaza and travel club lounge. The lounge works in coordination with DF as it provides more than 80% of overall traffic, and also reduces the need for lounges to tie up with multiple banks/card networks. DF covers 100% of lounges being operated in India. It has exclusivity in 11 lounges for India issued CC/DC.

It acts on an asset light model without any direct customer acquisition cost as it is done by banks/card network companies as a part of their card offerings. Dreamfolks does not invest in fixed assets of airport lounge as it is done by respective lounge operators.

High return ratios as DFS need not invest much in fixed assets(present fixed asset of 21Cr as per H1FY23). Their total number of full time employees is 63.

Key performance indicators of company expansion over last few years:

Industry tailwinds for growth:

**Growing air travel industry: The current ratio of Indian passenger traffic to overall population in India is low compared to western countries. Air travel industry is set to grow exponentially in coming years in India(13x by 2040). It is estimated that by 2030,domestic passenger numbers will be 503mn and international passengers will be 63mn. India will overtake the UK to become the third largest air-passenger market by 2024. Below is the estimated growth in India domestic and international passengers:

Growing no of airports and lounges:
No of airports in India have grown from 99 operational airports in fy18 to 125 in fy20 and during the same time no of passengers accessing lounges have grown from 5.1 million to 7.5 million at a CAGR of 21%. The Govt of India has a five year plan to develop 21 new greenfield airports, upgradation of existing airports and privatization of 13 airports.
UDAN aims to link underserved/unserved airports in the country by connecting 70 airports through 128 routes. It is estimated that India will have 295 airports by 2040.
Below is the attached estimation of Indian aviation growth:

Any airport with passenger movement of 5-6 million a year can accommodate a successful lounge. The top 24 global airports have an average of 7 lounges per airport, whereas in India it’s an average of 2 lounges/airport. It’s likely that the existing airport will expand by adding more terminals and subsequently number lounges per airport can increase in future.
India lounge market is expected to grow 4x times of current market size to reach 193 lounges by 2040.

Growing credit card penetration: Out of estimated 7.5 million passengers using lounges in India more than 80% passengers use CC/DC to access lounges.

The current credit card penetration is very low in India(3%) compared to other countries. With increase in income levels, education, employment level and change in customer attitude, credit card holders will set to grow in India. An Increasing number of financial institutes are offering credit cards and offering free airport lounge access to gain customers.
There were around 22 million CC users in 2015 which has increased to 60 million in 2020.The CAGR growth of CC issued between 2021-2040 is expected to be around 20% to reach 2.2 billion CC by 2040 and no of DC will be 3.5 billion.

All the CC/DC do not have lounge access facilities. The total no of cards with lounge access shown below:

Only 8% of card holders with lounge access use cards for lounges which is expected to increase with increase in awareness, travel …etc…

Other growth optionalities /recent tie ups:

1.Railway lounge access: presently DF is providing lounge services at 9 railway stations. With the government’s focus on railways and better facilities, more and more executive lounges are anticipated. With existing networks/lounge operator tie ups Dreamfolks can expand its revenue base. ( I am unable to find if CC/DC offers free access to railway lounges also).

  1. Recently DF partnered with Vidsur golf to give customers access to golf games and lessons at 40 plus Vidsur golf clubs throughout India and 250 plus golf club & resorts in Asia pacific region.

  2. Increase in non lounge revenue from current 5%. As DFS is expanding their business to other areas like F&B, transport assist, etc…and with more cross selling of services to clients, management has guided for 15% of revenue contribution from this segment in the next 2-3 years.

  3. Expanding international business. They have recently tied up with Aspire lounges in Australia through which they can provide luxury lounge access to Sydney, Melbourne, Perth and Brisbane as a part of 66 Aspire branded lounges globally. DFS is focusing on regions like the Middle east, Southeast Asia and Europe to expand international services.

Liberatha Peter Kallat ,Mukesh yadav and Dinesh Nagpal are the promoters of the company holding 66% of shares. Liberatha peter is MD of the company and has worked with Indian and MNCs in the hospitality sector. In the past she was associated Taj GVK, PepsiCo and Plaza premium group which runs airport lounges. While working at Plaza premium she could sense opportunity in providing service access to airport lounges and started the company. DFS began effective operations in 2013 by facilitating lounge access services for the consumers of Mastercard and expanded quickly. Liberatha peter deep understanding and direct involvement with key clients have led to growth of the company and has first mover advantage.

Dreamfolks came out with an IPO during August 2022 with issue size of Rs.562Cr with promoters selling around 33% of their shares( 17,242,368 equity shares offer for sale)which was subscribed 57 times. After reaching a high of Rs. 550 on listing day, the stock has corrected and seems to have made a double bottom on the daily chart at around 360-370 range. During recent China covid outbreak news it did break 360 levels for brief period.


During FY21 and FY22 revenue was impacted due to travel restrictions because of Covid-19 pandemic and seen strong rebound in H1 FY23. DFS may post profit of 60Cr for FY23 and is trading market cap of 1900cr which is not expensive considering the high growth possibility.


  1. Covid like pandemic which can impact the whole traveling industry
  2. Inability to retain clients like card networks, banks, etc…(even though their DRHP mention Visa card network, DFS website only mention Mastercard, RuPay and Dinner club as clients)
  3. Global economic slowdown which can impact the airline industry.
  4. Inability to retain relationship with lounge operators/airport authorities
  5. Adverse impact in lounge business like closing down temporarily( premium plaza lounges were closed recently at some of the airports)
  6. ?Limited entry barriers: Even though DFS claims they have deep integration with card/bank network apps it is possible for new entrants with deep pockets who can provide the same service at a much lower rate. This may take some time for the incumbent to establish a network with card providers and lounge operators.
  7. Currently competition is limited but global players like priority pass/dragon pass which have higher financial strength can gain market share.( for FY2019 dragon pass revenue was 1155cr and priority pass was 9422 cr)
  8. Direct tie up between lounge operators and card networks. This was asked to management and justification was its difficulty to integrate considering there are 18-20 lounge operators across the country and practically it’s difficult for the bank/card networks to do integrate business with many operators.
  9. Increase in UPI transactions could impact the relevance of CC to consumers.
  10. Trend of increase in receivables in last two years.
  11. RBI regulation on card network providers/merchant discount rate can impact credit card companies which may inturn limit free access to lounges.

Disclosure: INVESTED. Have done transactions during last 30 days.

Dreamfolks Services Limited- DRHP_20220124130618.pdf (6.9 MB)
industry-report-frost-sullivan.pdf (1.8 MB)

MD interview to various business channels during IPO

Airport authority of India release monthly traffic statistics across airports which helps to keep track on industry growth:


Nice write-up about the company.
In the risks section, you could probably add the below:-

  1. Trade Receivables are too high for a “Pay and Use” model company.
    2… Bidding for space in the airport is a tendering process and so is renewing the licenses/tenure etc. Who bids for operating and the space?

This is a small company trading at 100+ PE. Its sales has failed to reach sales of March 2020. In May 2022, domestic travel reached 95% of pre covid level but sales have not returned to those levels.

Company deals with much more bigger players so has no pricing power.

At 100 PE, in my view is avoid.

Disc: Not invested and are my personal views.

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@Ashusharma On TTM basis PE looks high due low growth in FY22. If we look at H1FY23 it has already reported net profit of 28Cr and likely that it will report 60Cr for full year, PE for FY23 will be 30-35 at current range of market cap.
If we look at the Oct and Nov month data of passenger movement across airports in India (Dec month data is yet to come) Q3 must be stronger quarter for DFS.
Seasonally also H2 revenue is higher than H1( source: Q2 concall)

Even if we consider minor impact on revenue which may happen due to temporary closure of two louges run by premium plaza( at Delhi and Hyderabad) ,H2 numbers must be better.
Total revenue for the H1 is 332Cr , crossing revenue of 367Cr for FY20 is not a challenge.

Key question to what extent it will grow in FY24 on high base of FY23 depending new airports/terminals. You must have noticed the existing lounges are running full and generally there is waiting period of around 10min to enter inside in airport like Bengaluru. Not much growth may be possible in existing lounges. Even though existing lounge size can be expanded to accommodate more people it will take time. Below image shows how average lounge size has increased from 2015 to 2019.

Agree that it does not have much pricing pressure and operating margins will remain around 12% as indicated by management.


Some notes.


  • Dont Own
  • Open to Correction
  • Aim to be as objective as possible; leaving subjective interpretation to reader.

Was interested in the business and the growth aspects ahead. Driven by the adage, ‘what the rich do exclusively now, will be emulated by the rest in-future’ - there is room for plenty of customers ahead. How many will be exclusive members (direct to DreamFolks) and how many via intermediaries (card benefits) is open to estimate.

Went through the RHP and presentation and Frost & Sullivan report (FSr) which is quite exclusively splashed by the company.

  1. FSr was paid for by the company.

  1. IPO was completely offer for sale. Hence nothing went to the business per-se.

  2. There are quite a few associated companies with DFS amidst them. There have been quite some monies exchanged either terms of advances-given or expenses-payble etc. Via Google one can find there are many companies hosted at (possibly) a flat in a housing site in Delhi.

Some companies share the same accounting email address too.

DFS now has a different corporate address - Gurgaon, Haryana.

Related party transactions need to be better understood.

  1. Is it the norm that intermediary like DFS has to indemnify the Operator for services?

  1. Un-stamped or inadequately stamped documents and enforcement of rights is an open-to-interpretation question.

  1. A categorical warning-statement that receivables will be high.

  1. An unsettled matter - possibly legal - but not explained further, exists.

  1. There are 60 (sixty) full time employees

  1. (This point is subjective) With 60 employees, and DFS claiming to be Asset Light and almost always hiring (or facilitating) external services, the company has higher assets in terms of Motor Vehicles than Computers. As DFS provides platform oriented facilities, would have felt their investment in IT should have been the highest among assets. Are these vehicles for usage of company personal? Or are they used for ferrying clients? How many - actual number - of vehicles are owned? Elsewhere there is a mention of hiring external vendor for vehicular services - so how differentiated are these company owned vehicles? At 54mn INR, this equates to 5.4 crores.

Subjectively - my opinions -

Have not been able to find the comfort in understanding Management positioning or MoS in terms valuation to take a position.

Am enthused by the ‘runway for growth’, ironically - it is literal in this case as business deals with Airports (runways) - that lies ahead for India in terms of population (volume), aspiration and airports. A cube-of-growth factors, that very few business can claim to boast of.

With IPO mania being the season, perhaps as other new age companies have weaned themselves away from highs after a year or so of running, DFS may feel the heat too. Especially after the Anchor Investor lock (of 1 year?) ends.


Dreamfolks announced superb Q3 results:

Domestic air traffic grew by 63% for 9MFY23 and 16.6% for Q3FY23 (yoy)
Passengers accessing airport lounges and other touch points through DFS stood at 2.15 million in Q3FY23 compared to 1.14 million in Q3FY22.
Onboarded 5 new clients including Akasa Airlines.
Press release:
06322ec9-6ecf-492e-a973-ec27f34e6a13.pdf (2.0 MB)


So total outstanding with related parties as on 30-Sep-21 is about 7cr which I think is not a big amount.

Both Dragonpass and Prioritypass are present in India their lounges list can be accessed from the following links respectively -

My understanding is that multiple service providers can be present at the same lounge. So same lounge can be serviced by Dragonpass as well as Dreamfolks.

Disclosure - Not invested.

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Air India to buy 250 aircraft from Airbus & 220 aircraft from Boeing. I could find the delivery schedule of these aircraft but aircraft industry is growth bound adding tailwind to Dreamfolks.

Visa is not with Dreamfolks any more.

Screenshot from 2023-02-16 15-42-51

Had beaten competition and taken market share from them in India.

Growth Drivers

  1. Credit card circulation increased by 18% in Dec 22 YoY.
  2. Airport traffic is increasing by 10-15% per annum.
  3. Conversion rate of air passengers is 5%, internationally it is 12%
  4. Lounge space increase.

Screenshot from 2023-02-16 16-21-34

Screenshot from 2023-02-16 16-27-37

Disclosure - Not Invested. Not sure if valuation is right.


In my opinion existing airports footfall is the growth driver for business.

New airports, increase in cards issuing, capturing some international clients all these are bonuses.

I believe that we may see huge growth in few years. If they can add some international clients then sharp growth will be there


Dreamfolks aquires 60% stake in Vidsur Golf pvt limited at cost of 1.5cr.
Turnover of Vidsur Golf pvt ltd:
FY23: 1.06 Cr (accounts dated 15/02/2023)
FY 22: 38 lac
FY 21: 16 lac
FY 20: 52 Lac
Vidsur is an aggregator which tie sup with golf clubs directly or indirectly through master aggregators. It offers golf course games, lessons and customized golf programs. Its clients are network providers ,card issuers and their end users.
Vidsur has tie up for 40+ golf courses across India and 1800+ golf courses in rest of the world.
Vidsur website mentions more than 100+ clients like VISA,Kotak,HSBC,Standard chartered etc…


Inspiring journey of dreamfolks


Tracking air passenger traffic is one of the leading indicator of Dreamfolks business. Below is the data for Q3 FY23 indicating international and domestic passenger movement in India during Jan-March 23 which shows significant increase in no of passengers(in millions) compared to same period of last year.

2022-23 2021-22 change
International 15.9 8.2 93.7
Domestic 74.7 49.1 52.2
Total 90.6 57.3 58.1

Source: Monthly release of air traffic data by AAI.

One of the key risk for DFS business is credit card companies canceling free access to airport lounges which seems to have happened for some of the SBI and HDFC card holders. Despite this I have noticed lounges are fully occupied during my travel in last few weeks.

Disc: remains invested.


As per their presentation only 8% eligible card holders are availing lounge access. As air traffic increase I feel this % will also move up.

May be very silly question regarding the business model, if any of the forum members can shed light on them it would be really helpful.

  1. Currently if one visits an airport lounge, then one can access the lounge through bank credit/debit cards by swiping the machine or present a priority pass or Dreamfolks pass. If one presents a CC/DC then does Dreamfolks earns any revenues? or revenue comes in only if Dreamfolk card is presented OR is it that independent on whichever card is presented, the lounge operator uses the system of DF to verify the eligibility of the traveler?
  2. What is the general economics of these transactions, as in how much the customer is paying (lets say either free or 800 types), then how gets recognized as revenue and costs for Dreamfolks. The first thread mentions 130 coming to DFS, but what would be its costs? and secondly, who is finally paying these costs? I am assuming the CC/DC companies are paying these charges, so there should be a high pricing pressure on DFS to reduce these charges as being just a network enabler and taking ~ 15% of charges seems a very high margin, so what is a sustainable revenue per pax?
  3. If say a bank has tied up with DF, and the customer visits an international location where DF doesn’t have a direct tie-up can the customer still visit the lounge and then how does the economics gets distributed?
  4. What is the real value-add that DFS is providing, why can’t the network players by-pass DFS and tie-up with the corporates who operates the lounges? Is it some tender process which doesnt aligns with the network guy’s DNA or something else?
  5. The biggest CC spenders, typically gets the premium credit cards like HDFC Regalia, Infinia which comes with the Priority Pass cards, so in case these high spenders visits the lounge then does DFS earns a revenue (even if the customer swipes his CC/DC and not Priority Pass cards), or is that the more economical cards are DFS tied-up and more premium is Priority Pass partnership?

Yes. The CC/DC pays to dreamfolks and they in turn pay to the lounge operator.

Only for the card issuers affiliated with dreamfolks. For example, Lounge access via Priority Pass will have nothing to do with dreamfolks.

Full 800 is revenue for dreamfolks, cost is of course the payment to lounge operator and their operational, IT expenses etc etc…

For now, the banks.

Not sure, how sustainability can be answered!! Many-to-many linking is always a lucrative market. The one who connects them, stands a good chance to do well. Here on one side, there are many banks/institutions/cc-dd issuers on other side many lounge operators… both need access to other side. If they do it independently, on their own, without a middle person like dreamfolks, good chance of incurring more costs?

Most of your questions are already answered in the 2 con calls they have held. Would suggest to go through them.


Thanks @rajpanda will go through the con-call;

Regarding the last question, what DFS is doing can be classified as either a broking service (say ICICI Direct, Zerodha) or infra play (e.g. CAMS/CDSL). While the market economics can be very different depending what role the company is playing but eventually the revenue gets squezeed, so the15% margin seems very lucrative for a connector role and will attract competition (unless Priority Pass sticks to a premium positioning). Your/members views on it?

I have just gone through the Frost Sullivan report, so revenue/macro trend wise I understand that there is big runway, but the report didn’t mention anything on the profitability, if anyone has that data, then it would be really helpful, if its present in the concall/DRHP then please ignore.

For some reason the industry has not attracted many competitors even though the industry itself is not really new. Dreamfolks mentions only other players in this industry are priority pass and dragon pass and since dreamfolks has risen while these players were incumbents in the market, so they do get some brownie points for winning against the odds. Logically speaking (ignoring all the rationale/explanation given by mgmt.) this does appear like a easy to enter and gain market by undercutting price kind of industry. But so far the evidence suggest otherwise. Let’s see…

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Some CC offer free Railway lounge access


Good questions @divygupta which are well answered by @rajpanda .

As per my understanding its not tender based process, its more of corporate relationships which will get you the deal.

Banks/card network providers may not be interested in this business as it may not move the needle for them. Lets take Dreamfolks revenue as 600 cr for the year and assume HDFC cards contribute around 20% of it. ( HDFC card market share is 21%). By directly integrating with lounge operators HDFC can save revenue of 120 Cr( 20% of 600 cr). Out of this 120Cr , they have to pay around 85% (102Cr ) to lounge operators. Remaining 18Cr is the actual revenue saved for HDFC and add separate employee, system integration, installing the software/devices at lounges, tying up and maintaining accounting/invoicing for around 18 lounge operator’s across India. At the end HDFC may not save more than 10-15cr. Compare it with HDFC net profit of 46,000 Cr for FY23.
In my view there is not enough incentive for the banks/network providers to do this as it may not move the needle for them.
Its still possible that banks or new platforms companies( like ezydinner etc who already have some relationship with card network providers) may enter the space and that’s the risk we have to be aware.

Probably you are right. Based on my scuttlebutt and reading looks like priority pass has access to most of the premium lounges and dreamfolks seems to have less market share here. This is one of the question I want to ask management during Q4 concall scheduled on 24th May at 11.00 AM