DAM Capital Advisor IPO

DAM Capital advisors is an investment bank in India. It offers investment banking solutions, including equity capital markets(ECM), Merger and Acquisitions(M&A), Private equity(PE), and structured finance advisory. Additionally company provides institutional equities services, such as broking and research.

DAM Capital is the fastest growing investment bank in India by revenue CAGR from Fiscals 2022 to 2024 with the highest profit margin in Fiscal 2024, among the peers considered. DAM Capital are one of the leading investment banks in India with a market share of 12.1% based on the number of initial public offerings and qualified institutional placements undertaken by us as the book running lead manager in Fiscal 2024. We provide a wide range of financial solutions in areas of (i) investment 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.

DAM capital has completed 67 equity capital market(ECM) transactions, including 26 initial public offering (IPO's) 15 qualified institution placement (QIP's), 5 offers for sale (OFS), 6 preferential issues, 3 rights issues, 7 buyback, 4 open offers, and 1 IPO of units by a real estate investment trust(REIT).

The firm has provided advisory services for 20 transactions, including M&A, Private equity(PE), and structured finance, along with executing block trades.

The company's institutional equities business serve 257 active clients, including registered foreign portfolio investors(FPI's) from diverse regions such as India, the USA, the UK, Europe, Hong Kong, Singapore, Australia, Taiwan, South Korea, the middle east and South Africa.

DAM capital claims to have strong relationship with institutional investors, financial sponsors, corporates, and family offices. The company believes that this is because of the experienced team members, and consistent client engagement, which has led to repeat business from many client.

The company operates in a highly regulated environment. Therefore, any adverse changes in laws, regulations, and government policies could negatively impact its business operations and finances.

The company success relied on the leadership of its promoter and managing director, Dharmesh Anil Mehta, along with its directors and key managerial personnel. If any of these leaders decide to part ways with the company or the company fails to retain them, the operations and the business performance could be adversely affect.

The company relies heavily on its IT systems to efficiently record and process large volumes of transactions daily. Any failure or inadequacy in these systems could disrupt operations and negatively affect the client experience, impacting overall business performance.

A significant portion of the company's revenue is derived from advisory fee income and brokerage services. Advisory fees contributed Rs. 124.36 crore(68.33%), Rs 52.29 crore(61.49%), and Rs. 61.11 crore(64.67%) to revenue from operations in FY24, FY23, and FY22, respectively , while brokerage contributed Rs. 49.47 crore(27.18%), Rs.29.15 crore(34.28%) and Rs. 30.24 crore(32.00%) to the revenue operations in FY24, FY23 and FY22, respectively. These revenue streams are susceptible to macroeconomics conditions. Any adverse development in the macroeconomic condition could adversely impact the two revenue streams, which could be detrimental to the company's operations and financial performance.

The company faced losses in its stock broking business amounting to Rs. 14.78 crore in FY23 and Rs. 11.66 crore in FY22. Further declines in brokerage income could adversely impact the company's financial health and operational results.

The company and its directors are involved in certain ongoing legal proceedings. Any adverse judgements in any of these cases could be detrimental to the company's business prospects.

As of March 31,2024, the company's total outstanding borrowing stood at Rs. 77.77 crore. Any inability to repay pr services these loans could adversely affect the company's financial position.

Net profit - The company's net profit has shown significant year-on-year growth. It was Rs. 22 crore in March 2023, Rs. 9 crore in March 2024, and surged to Rs. 71 crore in September 2024.

• Conclusion - The company's net profit has shown significant growth year on year, with a notable increase from Rs. 9 crore in March 2024 to Rs. 71 crore in September 2024, reflecting a strong financial performance. This upward trend indicates effective strategies and positive growth in profitability.

Fixed Assets - The company's fixed assets were Rs. 11 crore in March 2023, reduced to Rs. 10 crore in March 2024, and further decreased to Rs. 7 crore in September 2024.

• Conclusion - The company's fixed assets have decreased steadily, from Rs. 11 crore in March 2023 to Rs. 10 crore in March 2024, and further to Rs. 7 crore in September 2024. This decline may suggest asset disposals, depreciation, or a shift in the company's investment strategy, potentially focusing on more liquid or operational assets.

Investments - The investment value was Rs. 6 crore in March 2023, decreased to Rs. 4 crore in March 2024, and remained steady at Rs. 4 crore in September 2024.

• Conclusion - The company's investment value has decreased from Rs. 6 crore in March 2023 to Rs. 4 crore in March 2024, with no change in the value by September 2024. This suggests a reduction in investments, possibly due to asset sales or reallocating funds, with the value stabilizing at Rs. 4 crore in recent months.

Trade Receivables - The trade receivables were Rs. 186 crore in March 2023, reduced to Rs. 24 crore in March 2024, and increased to Rs. 42 crore in September 2024.

• Conclusion - The company's trade receivables have significantly decreased from Rs. 186 crore in March 2023 to Rs. 24 crore in March 2024, indicating improved collection efficiency or a reduction in sales on credit. However, trade receivables have risen again to Rs. 42 crore in September 2024, suggesting a potential increase in credit sales or a delay in collections.

Cash Equivalents - Cash equivalents were Rs. 756 crore in March 2023, decreased to Rs. 161 crore in March 2024, and slightly increased to Rs. 178 crore in September 2024.

• Conclusion - The company's cash equivalents have significantly decreased from Rs. 756 crore in March 2023 to Rs. 161 crore in March 2024, indicating a substantial reduction in liquid assets. However, the value has slightly increased to Rs. 178 crore in September 2024, suggesting some recovery, though cash reserves remain considerably lower compared to the previous year. This could reflect increased expenditures, investments, or changes in working capital.

Loans n Advances - Loans and advances were Rs. 9 crore in March 2023, remained the same at Rs. 9 crore in March 2024, and decreased to Rs. 4 crore in September 2024.

• Conclusion - The company's loans and advances remained stable at Rs. 9 crore from March 2023 to March 2024, indicating consistent lending or advances during that period. However, by September 2024, this amount decreased to Rs. 4 crore, suggesting a reduction in loans or advances, possibly due to repayments or a shift in the company's financial strategy.

Other Asset Items - Other asset items were Rs. 233 crore in March 2023, reduced to Rs. 8 crore in March 2024, and increased to Rs. 21 crore in September 2024.

• Conclusion - The company's other asset items have decreased significantly from Rs. 233 crore in March 2023 to Rs. 8 crore in March 2024, and then slightly increased to Rs. 21 crore in September 2024. This sharp decline followed by a modest increase suggests significant adjustments or disposals of assets, with a potential focus on streamlining operations or improving liquidity.

Reserves - Reserves were Rs. 81 crore in March 2023, increased to Rs. 148 crore in March 2024, and further grew to Rs. 188 crore in September 2024.

• Conclusion - The company's reserves have steadily increased from Rs. 81 crore in March 2023 to Rs. 148 crore in March 2024, and further to Rs. 188 crore in September 2024. This consistent growth indicates a strong accumulation of retained earnings, reflecting positive financial performance and prudent management of profits over the period.

Borrowing - Borrowings were Rs. 3 crore in March 2023, increased to Rs. 5 crore in March 2024, and were completely cleared, standing at Rs. 0 in September 2024.

• Conclusion - The company's borrowings increased from Rs. 3 crore in March 2023 to Rs. 5 crore in March 2024, but were completely cleared by September 2024, with borrowings reducing to Rs. 0. This indicates a positive shift towards debt reduction, highlighting improved financial health and the ability to repay liabilities within a short period.

Other Liabilities - Other liabilities were Rs. 1,103 crore in March 2023, significantly reduced to Rs. 47 crore in March 2024, and slightly increased to Rs. 55 crore in September 2024.

• Conclusion - The company's other liabilities have significantly decreased from Rs. 1,103 crore in March 2023 to Rs. 47 crore in March 2024, and slightly increased to Rs. 55 crore in September 2024. This sharp reduction suggests a major reduction or settlement of liabilities, indicating improved financial stability and a focus on reducing outstanding obligations.

Cash from Operating Activity - Cash from operating activities was Rs. 37 crore in March 2022, increased to Rs. 679 crore in March 2023, and then turned negative with Rs. -595 crore in March 2024, indicating a significant decline in cash generated from operations.

• Conclusion - The company's cash from operating activities saw a substantial increase from Rs. 37 crore in March 2022 to Rs. 679 crore in March 2023, indicating strong cash flow generation. However, in March 2024, it turned negative at Rs. -595 crore, reflecting a significant decline in operational efficiency or increased outflows, possibly due to higher expenses, changes in working capital, or other financial challenges.

Cash from Investing Activity - Cash from investing activities was Rs. -28 crore in March 2022, increased to Rs. -671 crore in March 2023, and remained negative at Rs. -658 crore in March 2024, reflecting substantial outflows due to investments or capital expenditures.

• Conclusion - The company's cash from investing activities has consistently been negative, moving from Rs. -28 crore in March 2022 to Rs. -671 crore in March 2023, and further to Rs. -658 crore in March 2024. This indicates significant investments or capital expenditures, reflecting a focus on expansion or asset acquisition, which has resulted in a continuous outflow of cash over the period.

Cash from Financing Activity - Cash from financing activities was Rs. -3 crore in March 2022, slightly decreased to Rs. -4 crore in March 2023, and remained the same at Rs. -4 crore in March 2024, indicating modest outflows related to debt repayment or other financing activities.

• Conclusion - The company's cash from financing activities has remained negative, with a slight decrease from Rs. -3 crore in March 2022 to Rs. -4 crore in both March 2023 and March 2024. This suggests that the company has had minor outflows related to debt repayment or other financing activities, indicating limited reliance on external financing over the period.

Debtor Days - Debtor days decreased significantly from 797 days in March 2023 to 48 days in March 2024, indicating a substantial improvement in the company’s ability to collect payments from customers more efficiently.

• Conclusion - The company's debtor days have significantly decreased from 797 days in March 2023 to 48 days in March 2024. This sharp decline indicates a substantial improvement in the company's receivables management, with a quicker turnaround in collecting payments from customers. It reflects better efficiency in converting credit sales into cash.

Cash Conversion Cycle - The cash conversion cycle decreased drastically from 797 days in March 2023 to 48 days in March 2024, reflecting a significant improvement in the company's efficiency in managing inventory, receivables, and payables, allowing for quicker cash turnover.

• Conclusion - The company's cash conversion cycle has drastically improved, dropping from 797 days in March 2023 to 48 days in March 2024. This significant reduction indicates a marked improvement in operational efficiency, as the company is now able to convert its investments in inventory and receivables into cash much faster, enhancing liquidity and overall financial health.

ROCE% - ROCE% was 73% in Mar2024.

• Conclusion - The company's Return on Capital Employed (ROCE) was 73% in March 2024, indicating highly efficient use of capital. A ROCE of 73% suggests that the company is generating significant profit relative to the capital invested, reflecting strong operational performance and effective utilization of assets to generate earnings.