Happiest Minds shares end debut trade at 125% surge from IPO price

Information technology (IT) services firm Happiest Minds Technologies’ stock concluded trade on Thursday, its debut day on NSE, at a price of Rs 370, a 125% high against the issue price of Rs 166 per share.

The stock reached a high during its morning trade at Rs 395 per share, a 139% surge from the issue price, according to data on the stock exchange.

This was a maiden IPO completed using technology in the Covid-19 era, ICICI Securities’ Investment Banking technology head Sam Kamath said at the listing ceremony on Thursday morning.

“All the process, items relating to prospectus drafting, filing, marketing roadshow, and the IPO launch... was done virtually despite the national lockdown,” Kamath added.

Last week, the firm’s initial public offering (IPO) that was set to raise about Rs 700 crore, was subscribed about 151 times on its final day offer.

The 2011-founded IT firm received the SEBI nod for a public listing last month. The Ashok Soota-led firm opened its IPO for retail investors from September 7 to 9.

"97% of our business is digital and 88% of delivery is agile. All the larger Indian IT companies, certainly the listed ones have 30-50% of their business digital... the digital market is growing much faster than the traditional IT services and this is what has enabled us to grow at a compounded average growth rate of well above 20% as compared to the 8-10% growth rate for the industry,” Soota said at the listing ceremony.

According to its red herring prospectus, the Bengaluru-based reported total revenue of Rs 714 crore in sales for the financial year ended March 31, 2020, up 18.6% from a year earlier. Its profit grew five times to Rs 71 crore for the same period.

Early September, it raised Rs 315.9 crore from 25 anchor investors that included the government of Singapore, Goldman Sachs India Fund, Kuwait Investment Auth Fund, Nomura Funds Ireland and SBI Life Insurance.

Happiest Minds works with enterprise customers to enable digital transformation services using data analytics, artificial intelligence, cognitive computing, internet of things, cloud, security, blockchain and automation.

It primarily serves US customers in sectors such as retail, edtech, industrial, financial services, hi-tech, engineering research and development, manufacturing, travel, media and entertainment.

For the period between financial years 2017-18 and 2019-20, Happiest Minds generated most of its sales from the US market. The country made up 73.5% of its revenue in FY18, 75.5% in FY19 and 77.5% in FY20. The figures are higher than those of mainstream IT firms in the US market, which range between 45% and 60%.

The NIFTY IT index, which tracks all IT firm stocks listed on the NSE, on Thursday closed at 19,817.70 levels, marginally up 0.24%.