The Initial Public Offering (IPO) of Happiest Minds Technologies Limited (HMTL), opened for subscription today i.e., 7 September 2020. The issue has received subscription of 2.87 times at the end of the opening day. The issue has received total bids for 66709800 equity shares against the offer of 23259550 equity shares.
The company is raising funds of up to Rs. 702 crore and has set the price band at Rs. 165 to Rs. 166 per equity share. Ahead of the IPO, IT services firm HMTL raised Rs. 316 crore from anchor investors, including Government of Singapore, Goldman Sachs and Kuwait Investment Authority.
The Retail Individual Investors(RIIs) have given a big thumbs up for the IPO with excellent response on the first day itself. The retail portion has received bids for 61800120 equity shares against the offer of 4229009 equity shares resulting in subscription of 14.61 times. Bids for 46361070 equity shares were received at cut-off price and 15439050 equity shares at price bids.
The Qualified Institutional Buyers (QIBs) portion of the issue has received subscription of 0.08 times with bids for 992430 equity shares against the offer of 12687028 equity shares. Domestic Financial Institutions(Banks / Financial Institutions(FIs) / Insurance Companies) have bid for 963810 equity shares and others have bid for 28620 shares.
The Non Institutional Investors portion of the issue has received bids for 0.62 times with subscription for 3917250 equity shares against the offer of 6343513 equity shares. The Corporates have bid for 172260 equity shares, Individuals(Other than RIIs) have bid for 3592800 equity shares and others have subscribed for 152190 equity shares.
HMTL is a strong brand in the digital IT services space and derives 97% of its revenue from digital services while compared to 50% by its closest midcap peer. On the financial front, FY18-20, its revenue growth stood at 20.8% on a CAGR basis while its 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. Based on FY20 EPS the P/E works out be 34x which is close to large cap IT players.