Happiest Minds Technologies makes stock market debut at Rs 383 apiece, up 131% from issue price

The Rs 700 crore IPO of Happiest Minds saw investors bid for 351 crore shares against the issue size of 2.32 crore.

Happiest Minds technologies shares made their stock market debut today at a price of Rs 383 per share, a premium of Rs 217 on the upper band of the issue price of Rs 165-66 per share. The stock began trading 131% higher from the issue price . Happiest Minds Technologies IPO was subscribed 151 times with all portions being oversubscribed by the investors. Non-Institutional Investors (NII) had bid the most for the stock. The Bengaluru based Information Technology company, backed by 77-year old entrepreneur Ashok Soota, was commanding a grey market premium of Rs 140 per share till yesterday. 

The Rs 700 crore IPO of Happiest Minds saw investors bid for 351 crore shares against the issue size of 2.32 crore. At the end of the three day bidding process retail investors subscribed their portion 70.94 times while Qualified Institutional investors (QIB) subscribed their portion 77.42 times. The biggest rush for investment came from Non-Institutional investors, who bid for the issue 351 times. For the Anchor Book portion of the issue, prominent investors like GIC, Baillie Gifford, Goldman Sachs, Franklin Templeton, Fidelity, Birla MF, ICICI Prudential MF, SBI Life, HDFC Life, and Nippon MF participated.

Speaking ahead of the listing, Happiest Minds Executive Director Ashok Soota said, “Digital market is growing much faster which has enabled Happiest Minds Technologies to grow at a CAGR of 20% compared to the industry average of 8-10%.” Happiest Minds Technologies derives 97% of its revenues from Digital IT services by offering services like cloud, SaaS, security, analytics and IoT, compared to 30-50% for traditional Indian IT services peers.

Analysts say, stocks from the IT space could witness positive momentum in the post-coronavirus world businesses across the globe opt in for a more digital oriented growth which translates to more business for such firms.  “Considering FY20 adjusted EPS of Rs 6.2, the price band implies a P/E ratio of 26.6X, comparable to its larger mid-cap peers such as LTI, Mindtree and NIIT Tech. Based on management comments, the implied P/E multiple for Happiest Minds is ~12X if we annualize 1QFY21 EPS,” said IIFL Securities in a note. 

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