Happiest Minds IPO Details
Happiest Minds Technologies Ltd. received the go-ahead to launch an IPO in August from SEBI in order to raise Rs. 7,000 mn. The Bengaluru based company has come forward as a strong brand in the IT and Digital Service industry with a scalable business model and multiple drivers for steady growth.
- The IPO Issue is a combination of Fresh (Rs. 1,100mn) and Offer for Sale (Rs. 5,884.5 - 5,920.2mn).
- The total Issue Size is 42.290 - 42.330mn shares (Rs. 6,984.5 - 7,020.2 mn).
- The issue is through a book-building process with the price of Rs. 165 - Rs. 166 per share.
- The offer represents around 28.8% of its post-issue paid-up equity shares of the company.
Happiest Minds IPO Date
||7th September 2020
||9th September 2020
||14th September 2020
|Initiation of Refunds
||15th September 2020
|Credit of Shares to Demat Account
||15th September 2020
|Happiest Minds IPO Listing Date
||17th September 2020
Happiest Minds IPO Price
|IPO Price Band
||Rs. 165 - Rs. 166 per share
|Minimum Investment Amount
|Maximum Investment Amount
||Rs. 2 per equity share
Happiest Minds IPO Lot Size
|Minimum Lot Size
||1 (90 shares)
|Maximum Lot Size
||13 (1,170 shares)
Happiest Minds IPO Review/Ratings
Global technological spend is estimated to grow by 6.3% CAGR over 2019-25, from USD 4.2tn in 2019 to USD 6.1tn by 2025. During this period, legacy IT services are likely to grow by 2.1% CAGR, while digital services are estimated to grow by 20.2% CAGR.
Peer Comparison and Valuation - At the higher price band of Rs. 166 per share, their share is valued at a P/E multiple of 29.4x (to its restated FY20 EPS of Rs. 5.6), which is at a premium to peer average of 25.9x.
The issue seems to be fully priced as compared to its domestic peers. The company has earned an average 97.1% of the revenue from digital IT services as compared to its domestic peers, which earned in the range of 30-50%. Thus, the company cannot be fully comparable to domestic peers.
There are international peers, who derive almost all of their revenue from digital services, trading at a P/E multiple ranging from 67-139x. Assuming the valuations of these companies in the US markets are frothy, the valuation demanded by Happiest Minds seems to be attractive.
They have been growing high revenue-generating customer accounts, have multiple drivers for steady growth and strong R&D capabilities.
A cause of concern, however, would be the subdued economic growth, intense competition and unfavourable movement in forex rates.
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Happiest Minds IPO Subscription Breakup
|Retail Individual Investors
Happiest Minds IPO Fundamental Analysis
Net Profit increased from Rs. 142.1 crore in FY 19 to Rs. 717.1crore in FY 20.
Revenue Growth for FY 20 = 18.3% from 5903.6 mn in FY 19 to 6982.10 mn in FY 20.
Over FY18-20, the company derived a majority of the revenue from the USA (around 75.5%). This is followed by India (around 11.8%) and the UK (around 9.4) markets. Currently, it is focusing on growing business from the European markets.
In FY20 and Q1 FY21, the company derived 96.9% and 96.3% of its revenue from digital IT services.
Return on Equity (ROE) for FY 20 = 22.1%
Return on Assets (ROA) for FY 20 = 16.3%
Debt to Equity Ratio (D/E) for FY 20 = 0.2%
Earnings Per Share (EPS) = 5.6
Price to Earnings Ratio (P/E) = 29.4
- Price to Book Ratio (P/B) = 6.5
- After this issue, the promoter stake will decrease from 61.77% to 53.25% and public shareholding will increase from 34.16% to 42.86%.
Online Procedure to Apply For Happiest Minds IPO
Click here to read the entire procedure to apply for the IPO
Apply for Happiest Minds IPO with Jiffy
- Go to the IPO Section => IPO Listing => Open IPO.
- On tapping Happiest Minds IPO, you can directly click on Subscribe to apply or even view the IPO details.
- On the Subscribe Screen/Page, you will be required to enter the number of lots, cut-off price, UPI ID and tap Verify.
- Once you select ‘Subscribe’. Your bid will be executed.
- You can check the status of your IPO bid in the IPO Transactions section.