Happiest Minds IPO: Why is it making waves in the primary market?

Happiest Minds IPO: How was Happiest Minds Technologies IPO received by the investing public? Will all investors in the IPO get allotment? What’s the company doing?

Happiest Minds IPO: Happiest Minds Technologies, which came out with an initial public offering (IPO) recently, was a big success in the capital market, leading to oversubscription of 151 times. Founded by IT veteran Ashok Soota, the company has proved that the IPO market is alive and kicking and good IPOs will be welcomed by the investing public.

How was Happiest Minds Technologies IPO received by the investing public?

Happiest Minds Technologies IPO, which closed on September 9, was oversubscribed 151 times. It got bids for 3.51 billion shares versus the 23.3 million on offer, ranking it among India’s most successful first-time share sales of this decade. The price band for the offer was fixed at Rs 165-166 per equity share. Post IPO, the promoter’s stake will come down to 53 per cent from 62 per cent.

Will all investors in the IPO get allotment?

All investors are unlikely to get the allotment due to huge oversubscription. The quota for institutional investors was subscribed over 77 times. For non-institutional investors, 6.3 million shares were allotted and were subscribed over 351 times. In the case of retail Individual Investors (RIIs), 4.2 million shares were allotted and were oversubscribed almost 71 times. “The share is likely to list at a premium of 35-40 per cent on the stock exchanges. Listing is likely to be on September 17,” says BSE dealer Pawan Dharnidharka.

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What’s the company doing?

Happiest Minds Technologies is an IT services company founded in 2011 by Ashok Soota. Positioned as “Born Digital, Born Agile”, it provides end-to-end solution in the digital space. Its business is divided into three categories — digital business service (DBS), product engineering service (PES) and infrastructure and management security service (IMSS). As of June 2020, it had 148 active customers with a global presence in countries like the US, the UK, Australia, Canada and the Middle East. In the three months ended June 30, 2020, its total income was Rs 1,869.9 million, EBITDA Rs 478.2 million and its restated profit for the quarter was Rs 501.8 million.

Who is Ashok Soota?

Ashok Soota, 77, a well-known name in the IT sector, was the founding chairman and managing director of MindTree Ltd. Soota was instrumental in the growth and listing of Mindtree. He left MindTree in 2011 and sold nearly all his remaining stake in the IT firm to the late VG Siddhartha’s Coffee Day Resorts. Sidhartha later sold the MindTree stake to Larsen & Toubro for Rs 3,269 crore. Soota was earlier the President of Wipro Infotech and led the company’s growth till 1999.

What does Happiest Minds IPO signal?

The success of the tech company’s IPO indicates that the IPO market is likely to become active again. Though the benchmark Sensex has made a big gain in 2020, only two IPOs have hit the primary market with IPOs so far. “We can expect more IPOs in the near future. But keep in mind that investors will go for only good quality IPOs. Time may be ripe for PSU firms like LIC to hit the market with IPOs,” Dharnidharka said.