Happiest Minds IPO to open on September 7, price band fixed at Rs 165-166

Happiest Minds Technologies, an information technology (IT) services firm, on Wednesday announced that it will tap the equity markets to raise Rs 702 crore through its initial public offering (IPO). The issue will open for subscription on September 7 and will remain open till September 9. The company has fixed the price band at Rs 165-166 per equity share.

The Bengaluru headquartered IT services firm will have a fresh issuance of equity shares worth Rs 110 crore. The offer for sale component will see 3,56,63,585 shares being put on the block, which includes 84.1 lakh equity shares from Ashok Soota, the executive chairman and director who is also the promoter of the company along with 2.72 crore shares from CMDB II, a private equity fund. Soota is an IT industry veteran who was the president of Wipro’s information technology business between 1984 to 1999. He left the IT giant to co-found Mindtree, a mid-sized IT services company in 1999.

The face value of each share is of Rs 2 each and the bids for the offer can be made for a minimum of 90 equity shares and in multiples of 90 equity shares thereafter. The shares will list on both NSE and BSE.

Soota said that 97% of the company’s revenues come from the digital services and the compounded annual growth rate (CAGR) of the company is at 20.8%. He however, did not give any revenue guidance.

In a virtual conference, he said, “We are a born digital, born agile company which means 97% of our revenues come from digital services, 88% of our projects are delivered through the agile model. Where the other companies in India are on digital is at mostly 30% to 50% and, therefore, we compare ourselves not with them but the three global companies called EPAM, Endeavour and Globant which have got 100% of their business from digital.” He explained that digital was growing much faster than traditional business which is why the company had a CAGR of 20.8%.

The IT industry veteran also said that the majority of Happiest Minds Technologies’ business had not been impacted in the on-going pandemic.

“Covid-19 has hit the entire world and industry. We have been fortunate in the context that 76% of our business has not been impacted or only marginally been impacted, of which 42% is education and hi-tech. On the plus side, we have limited presence in travel and hospitality which is the worst hit segment.”

For FY20, the company saw a revenue of Rs 714.2 crore, and in FY 19 it stood at Rs 601.8 crore. The revenues for the first quarter ended FY21 stood at Rs 186.9 crore.