DreamFolks Services Ltd.'s shares plunged as much as 14% on Thursday after reports said major clients including ICICI Bank, Axis Bank, and Mastercard are looking to move away from the airport services provider.
The stock closed 10.3% lower at Rs 236.05 apiece on the NSE, compared to a flat Nifty 50.
Major Indian banks and card networks are looking to move away from aggregator DreamFolks Services to establish direct partnerships with airport lounge operators, and others also may follow suit, PTI reported citing sources said.
On Sept. 22 last year, DreamFolks — that offers lounge access services at several airports — had witnessed 'a temporary disruption in services' that led to impact lounge access of thousands of customers of banks and card networks.
Though the issue was resolved the next day, it sent the banks and card networks to explore other alternatives, three sources familiar with the matter said.
Leading the charge are Axis Bank and ICICI Bank as well as Mastercard, they said, adding more banks are expected to follow suit. While Axis Bank declined to comment, emails sent to ICICI Bank and Mastercard remained unanswered, the PTI report said.
DreamFolks, however, said in a stock exchange filing that its relationships with all partners "remain strong and fully intact".
"Contract negotiation is a part of the regular business process, which is carried on annually with the clients and has no relation with the alleged news," it said. The company's response came after market hours.
(This story has been updated with company's response)
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