Happiest Minds Technologies Ltd’s initial public offering (IPO) opened to a robust response on Monday with bids for nearly three times the number of shares offered.
The sale of shares was offered for 66.7 million shares against an IPO size of around 23.2 million shares, excluding the anchor book, data available in stock Exchange. The sale of shares will close on Wednesday. The portion for individuals was exuberant and was subscribed 14.61 times, while the portion reserved for non-institutional investors and qualified institutional investors was subscribed at 62% and 8% respectively.
Happiest Minds, which sells stocks in the price range of ₹165-166, aims to elevate ₹702 crore from the IPO.
Proceeds from the issuance will be used to meet long-term working capital requirements and for general corporate purposes.
Bengaluru-based Happiest Minds is promoted by IT entrepreneur Ashok Soota.
On Friday, the company raised ₹316 crore from anchor investors including the Government of Singapore, Goldman Sachs, the Kuwait Investment Authority, Nomura Funds Ireland, Jupiter India and Pacific Horizon Investment.
Motilal Oswal Financial Services said the issue is expected to offer listing gains given market conditions and promising prospects for IT companies in a post-covid era.
“At the high end of the price bracket, the show is valued at 29 times the FY20 price / earnings ratio, which is comparable to large mid-sized IT companies,” he said. .
A strong presence in digital services, a scalable business model with end-to-end capabilities and rapidly improving financial performance are a few factors for investors who favor the company, analysts at Motilal Oswal said.
“In the upper price range of ₹166, it is available at a price for a profit of 34 times FY20, which is a premium over its large and mid-cap peers. However, after annualizing the first quarter of FY21 numbers, we come to a PE of 12 times FY21, which looks attractive, ”said Geojit Financial Services Limited.
With a strong management pedigree and potential for growth in a post-covid-19 scenario, brokerage firm sees potential in Happiest Minds Technologies