In the world of investing, even the strongest companies can face unexpected setbacks if their business model relies too heavily on one segment. One such company currently under the spotlight is DreamFolks Services Ltd. Its stock has plunged over 33% in the past month and more than 53% over the last six months. What’s even more intriguing is the cause behind this decline — a rare and complex case involving technical issues, partner exits, and the growing influence of giants like the Adani Group. This case study offers deep insights into how unpredictable market forces can affect even the most seemingly solid businesses.
What Does DreamFolks Do?
DreamFolks was founded in 2008 and listed on the stock exchanges just a few years ago. Its core business lies in being a bridge between credit card companies and airport lounges. If you've ever accessed an airport lounge using your debit or credit card, chances are DreamFolks made it happen behind the scenes.
Here’s a simplified breakdown of its business in four steps:
Banks (like HDFC, ICICI, SBI, and Axis) offer airport lounge access with their cards to attract more customers.
When a cardholder swipes at a lounge, a small fee (say ₹2) is deducted, and the customer enjoys the lounge services.
DreamFolks pays the lounge operators for the service and charges the bank in return.
It keeps around 23% commission and passes the rest to the lounge operator.
This model has worked well so far, with about 93% of the company’s revenue still coming from this very segment. Recently, the company began diversifying into other areas, but it’s still early days.
What Went Wrong?
The problem traces back to September 22, 2024, when a massive technical glitch disrupted DreamFolks' operations across 49 lounges in 34 airports. Thousands of passengers were denied access despite having eligible cards. This failure affected not just customers, but also banks and lounge partners, particularly Travel Food Services (TFS), which was preparing for an IPO and lost an entire day’s business.
Then came trouble from the airport operators themselves. Adani Airport Holdings, which manages a significant number of Indian airports, also blamed DreamFolks for the disruption. Initially, this appeared to be a one-time issue. But it wasn’t.
The Big Blow
On June 20, 2025, a report surfaced that Axis Bank and ICICI Bank had ended their partnerships with DreamFolks. As expected, the stock took a nosedive. However, the company's MD and Chairperson, Liberta Peter Kallat, immediately denied the claims, stating that the news was false and misleading.
But just a few days later, on July 1, 2025, DreamFolks officially informed the exchanges that some of its programs with Axis and ICICI were no longer operational. Although they claimed the contracts weren't fully terminated, it became clear that the earlier reports were at least partially true. This led to another sharp decline in the stock price.
On July 2, Kallat returned to CNBC, indirectly accusing two major airport operators (believed to be Adani and GMR) of pressuring banks to work directly with them instead of going through third-party aggregators like DreamFolks. She claimed that these operators threatened to block card access to lounges unless banks complied.
Adani Enters the Scene
On July 3, 2025, Arun Bansal, CEO of Adani Airports, posted on LinkedIn that "no middlemen are needed." Adani has launched its own digital platform, Adani Digital, allowing direct integration with card providers like American Express. The company manages seven major Indian airports including Mumbai, Ahmedabad, Lucknow, Bengaluru, Jaipur, Guwahati, and Thiruvananthapuram — accounting for nearly 22% of India’s total air traffic.
This shift changes the game for DreamFolks. What was once a monopoly is now under siege by multiple players wanting to eliminate intermediaries and retain the entire margin for themselves.
GMR and TFS: The Other Threats
It’s not just Adani. GMR, the other major airport operator, and TFS, a food and lounge service provider, also appear to be vying for direct relationships with banks and card issuers. According to The Economic Times, between 80% to 85% of the country’s lounge traffic is now under the influence of just these major players.
So DreamFolks is no longer the only gatekeeper to India's airport lounge ecosystem. And that puts it in a very vulnerable position.
Revenue Impact and Diversification Challenges
DreamFolks has acknowledged that diversifying is the only way forward. They’ve already begun entering new sectors like:
Golf course access (2.1% of revenue)
Food and beverages (2.5%)
Railway lounges (1.2%)
Meet-and-assist and ultra-luxury services
However, these segments together still make up a tiny portion of total revenues. In 2023, airport lounges contributed 98% of total revenue. That figure is now 93% — a small improvement but not enough to offset the potential damage from losing major bank partnerships or airport access.
The company's historical growth has been impressive: revenue has grown nearly five times from ₹248 crore in 2019 to ₹1192 crore, and profit has surged from ₹15 crore to ₹65 crore. It has low debt, but its cash flows have recently been under pressure. Receivables have increased to ₹294 crore, which is concerning.
The Management Angle
Another issue raising eyebrows is executive compensation. Liberta Peter Kallat draws a salary close to ₹5 crore annually. Her prior experience includes being GM at Plaza Premium Group, a global leader in airport hospitality. While that gives her credibility, the company’s CTO, Balaji Srinivasan, reportedly draws over ₹11 crore annually — a hefty figure for a company with ₹65 crore in profit.
This has led to questions about the company’s spending on technology, especially since the recent disruption stemmed from tech failures. Kallat defended the expenses by stating that DreamFolks' tech infrastructure is different and innovative. But the entry of Adani’s digital platform has cast serious doubts on that claim.
A Lesson in Risk Management
The biggest lesson from DreamFolks' fall is about dependency. Relying on one segment for over 90% of revenue creates a fragile structure. Once that support is shaken — due to technology issues or competitive disruption — the entire business can crumble.
While the company talks about growth in other segments, management has admitted it will take at least three to four years for those ventures to gain significant market share.
So in the near term, the company will likely continue facing severe pressure. Investors should be prepared for short-to-mid term volatility and erosion in financial performance.
This is one of the most interesting and cautionary case studies for retail and institutional investors alike. DreamFolks was once an undisputed leader in a niche, fast-growing industry. But complacency, over-dependence, and resistance to change can undo years of effort in a matter of weeks.
If you're analyzing a company that relies too much on a single revenue stream, it's critical to evaluate what happens in a worst-case scenario. As DreamFolks has shown, when giants like Adani, GMR, and TFS enter the fray — the game changes overnight.
Disclaimer:
The content of this blog is intended for informational and educational purposes only. It does not constitute financial, investment, or trading advice. Readers are advised to conduct their own research or consult with a qualified financial advisor before making any investment decisions. The author and publisher are not responsible for any losses arising from the use of the information provided in this article. The views expressed are based on publicly available information and personal analysis at the time of writing.
