Happiest Minds IPO oversubscribed in less than 3 hours; retail investor subscription crosses 5 times

By: |
September 7, 2020 1:24 PM

Happiest Minds Technologies initial public offering (IPO) was oversubscribed within less than three hours from the opening of the window.

Retail investors oversubscribed their portion by over 400% taking their bidding to 5.44 times.

Happiest Minds Technologies initial public offering (IPO) was oversubscribed within less than three hours from the opening of the window. The IPO saw massive response from retail investors who subscribed to the issue over 5 times their quota. From the 2,32,59,550 shares that are up for subscription, bids were received for 2,53,23,020 shares which translated to a 1.09 times subscription rate. Happiest Minds Technologies, a IT service and consulting firm, run by Ashok Soota beat the market blues as Sensex and Nifty danced between gains and losses.

Qualified Institutional Buyers (QIB), were seen bidding for only 8% of the stocks that have been offered to them. QIBs usually enter on the last day of the subscription window. On the other hand, Non-Institutional Investors (NII) bid for 21% of their quota in less than three hours. Large part of the NII demand, for the 63,43,513 shares offered to them, came on the BSE. Retail investors oversubscribed their portion by over 400 times taking their bidding to 5.44 times on Monday morning. Retail investors have been offered only 42,29,009 shares.

The over Rs 700 crore issue of Happiest Minds Technologies includes an offer for sale for 35.66 million shares and a fresh issue of 6.6 million shares. “At the higher end of the price band, the issue is valued at 29x FY20 P/E (fully diluted), which is comparable to larger mid-sized IT companies,” said brokerage firm Motilal Oswal in a note. Happiest Minds is being eyed as a good bet in a defensive sector like Information Technology with its strong presence in digital services and fast improving financial performance. Happiest Minds IPO is offering shares in the Rs 165-166 price band. The IT company managed to raise Rs 316 crore last week. Anchor investors included the likes of the Government of Singapore, Goldman Sachs, Kuwait Investment Authority, and Nomura Funds Ireland, among others. 

A key factor driving the company’s business and attracting investors towards it is the strong promoter in Ashok Soota. Before establishing Happiest Minds in 2011, Ashok Soota was one of the founding members of MindTree Ltd prior to which he was also the vice chairman of Wipro Ltd. “Considering the very high exposure to digital services and strong promoter background we expect that the company will continue to grow at a faster pace as compared to similar sized companies and therefore should command a premium valuation to the peer group,” said Yash Gupta, Equity Research Associate, Angel Broking.

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