Happiest Minds IPO opens today: Listing, lot size, analysts ratings. Key things to know before you invest
Happiest Minds IPO: Happiest Minds Technologies Ltd, the digital IT and product engineering service provider opens its Rs 702-crore maiden initial public offering (IPO) for subscription today i.e (September 7). The price band of the offer has been fixed at Rs 165-Rs 166 per equity share.
The offer, which will close on September 9, comprises a fresh issue of Rs 110 crore and an offer for sale aggregating up to 35,663,585 equity shares, which include 8,414,223 equity shares by Ashok Soota (promoter) and 27,249,362 equity shares by CMDB II.
ICICI Securities and Nomura Financial Advisory and Securities (India) are the managers for the offer.
"We are 'Born Digital, Born Agile'... 97 per cent of our revenues come from digital services... Digital is growing much faster than the traditional market and, therefore, we are able to grow at 20-plus per cent compounded whereas the industry has come down to 8-10 per cent," Soota said, who was co-founder of Mindtree.
IPO listing and lot size
Happiest Minds Technologies shares will be listed on the BSE and the NSE. The minimum lot size of the offering is 90, which means investors have to apply for a minimum of 90 shares and in multiples thereafter. Happiest Minds shares are likely to get listed on September 17, 2020, brokerages told Mind.
KFin Technologies Private Limited is the registrar of the IPO.
Risk Factors
According to Live Mint, 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.
Here's what analysts say
According to Money Control, the majority of experts are bullish on the prospects of the company given the 97 per cent business comes from digital services segment which played a key role in COVID-19 crisis, strong growth in financials, attractive valuations compared to domestic and global IT players. Hence, they advised subscribing the issue not only for expected healthy listing gains but also with medium to long term perspective."Given Happiest Minds Technologies' growth profile and over 97 per cent digital revenue share, we believe the company can comfortably command a PE of 24x-25x, which makes the IPO valuation fairly attractive for long term investors. We recommend a subscribe to the issue, with the potential for healthy listing gains as well as long term stock price appreciation," KR Choksey said in its research report written by Lead Analyst, Harit Shah.
What brokerages say
Hem Securities:
“The company has shown strong growth in its financials in the last couple of years. It is a strong brand in digital IT services with growing high revenue-generating customer accounts, with a high proportion of repeat revenues and revenues from mature markets. We like the scalable business model of the company, which has multiple drivers of steady growth with experiences".
Geojit Financial Services:
The brokerage is positive on the strong management and recommends a subscribe rating on the IPO for long term perspective.
"Happiest Minds Technologies is a strong brand in the digital IT services space. The 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," Vinod Nair, Head of Research at Geojit Financial Services told Mint.
