IT services firm Happiest Minds Technologies has raised Rs 316 crore from anchor investors, ahead of its initial public offering that opens on Monday September 7. Some of the anchor investors include Government of Singapore, Goldman Sachs, Kuwait Investment etc. The third listing since the coronavirus pandemic disrupted the economy, as promoter Ashok Soota and investors look to pare holding. The mid-sized information technology company plans to raise Rs 702 crore by selling up to 4.23 crore shares at Rs 165-166 apiece, according to its red herring prospectus.
ICICI Securities and Nomura Financial Advisory and Securities (India) are the managers for the offer.
Listing and Lot Size: Happiest Minds Technologies shares will be listed on the BSE and the NSE. The minimum lot size is 90, which means investors have to apply for a minimum of 90 shares and in multiples thereafter. According to brokerages, Happiest Minds shares are likely to get listed on September 17, 2020. KFin Technologies Private Limited is the registrar of the IPO.
About the company: As of June 30, 2020, it had 148 active customers with a global presence in countries like US, UK, Australia, Canada and the Middle East. It draws over 95% of its revenue from digital IT services.In FY20, the company had reported revenues of ₹714 crore. This represents a CAGR for total income of 20.8% between FY18 and FY20. It has over 2,600 employees. In FY20, it had reported profit of ₹72 crore.
Soota noted that the company has limited presence in the travel and hospitality segment which are among the worst-hit.
Risk Factors: The adverse effects of coronavirus may remain uncertain. Also, the company’s revenues are highly dependent on a limited number of industry verticals. Any decline in demand for outsourced services in these industry verticals could reduce revenues and materially adversely affect business, financial condition and results of operations.
What analysts say: Geojit Financial Services recommends a subscribe rating on the IPO for long term perspective.” “Happiest Minds Technologies is a strong brand in the digital IT services space. Company derives 97% of its revenue from digital services while compared to 50% by its closest midcap peer. On the financial front FY18-20 revenue growth stood at 23% on a CAGR basis while profit witnessed a steady growth from Rs.14 crore in FY19 to Rs.72 crore in FY20 due to increase in sales, lower operating expenses and 50% reduction in interest cost in FY20,” says Vinod Nair, Head of Research at Geojit Financial Services. Another brokerage Angel Broking also recommends subscribe to the IPO.
