The IPO of Happiest Minds Technologies, which has drawn immense response from investors, was 4.60 times subscribed as of 12:30 PM on Day 2. The public issue has seen a 2.86 times subscription so far as it has received bids for 6.67 crore equity shares against IPO size of over 2.32 crore shares (excluding anchor book), according to data available on exchanges.
The Bengaluru-based IT company launched its Rs 702-crore public issue on Monday and the same will close on September 9. The company already raised Rs 316 crore through anchor investors’ book on September 4.
Happiest Mind is a small-sized IT services company promoted by Ashok Soota, who is also the executive chairman and director of the company. Before founding Happiest Mind in 2011, Soota was one of the founding members of MindTree before which he was also the vice-chairman of Wipro.
“At the upper end of the price band of Rs 166, the issue is valued at a P/E of 27x at FY20 EPS at Pre-IPO and a P/E of 34x on post IPO EPS of Rs 4.88. We believe the issue is priced at a premium owing to its robust business model and a major presence in the Digital IT space. The recent fancy for companies with differentiated business model instills confidence on this issue. The international peers which have a similar business model are trading at a P/E valuation of around 65x,” said Ajcon Global report made by Akash Jain, MBA (Financial Markets), Vice-President Research, which recommended subscribing the issue for listing gains, as per media reports.
In FY20, the company had reported revenues of Rs 714 crore – growing at a CAGR of 20.8% between FY18 and FY20. It has over 2,600 employees. In FY20, it had reported a profit of Rs 72 crore.
The IT company proposes to utilise the net proceeds from the fresh issue for meeting long-term working capital needs and general corporate purposes.