The Initial Public Offering (IPO) of Happiest Minds Technologies started for subscription today, as promoter Ashok Soota looks to raise funds to meet the long term working capital requirements.
He further said the average age of these women is 33 years.
Motilal Oswal Securities gave’Subscribe’ rating to the Happiest Minds Technologies IPO which opened now on Monday. Happiest Mind Technologies Ltd (HMTL) is among the top next generation digital transformation firm, focusing on providing a seamless digital experience to its customers. “In the end of the purchase price band, the issue is valued at 29 times the FY20 P/E (fully diluted), which is comparable to bigger mid-sized IT companies,” stated the broker house. Motilal Oswal Securities enjoys the company because of three main reasons — powerful presence in digital solutions, scalable business model with finishing capabilities and rapid improving financial performance.
The brokerage house is optimistic about bright prospects for IT businesses post covid. “Further considering market requirements and bright prospects for IT businesses post Covid-era, an individual may also get record profits,” the broker said. The cost band of the offer has been adjusted at $165 to $166 per equity share, and an offer for sale of up to 3.56 crore equity shares. The problem is looking for a valuation of 26.76 occasions FY20 earnings per.
The organization had a positive operating cash flow within FY18-20, which climbed by 229.4% CAGR to Rs 112 crore in the last financial year,The Rs 700 crore issue will include an offer for sale for 35.66 million stocks plus a brand new issue of 6.6 million shares.
Most analysts are bullish on the company as 97 percent of its business comes from the digital services section.
My View On— VJ (@VijayThk) September 6, 2020
Happiest Minds Technologies Ltd IPO
IPO Date – Sep 7, 2020 – Sep 9, 2020
IPO Price – ?165 to ?166 per equity share
Lot – 90
My View – You Must Subscribe
Target – 50% to 70% Gain In Opening ?#IPOVIEW#HappiestMindsTechnologies #Masterinone
The general public issue has seen a 117 percent subscription so far as it has received bids for 2.72 crore equity shares contrary to IPO dimensions of over 2.32 crore stocks (excluding anchor book), in accordance with the data on exchanges showed.
The reserved portion of retail investors has subscribed 5.84 occasions and of non-institutional investors 25 percent, although the portion set aside for qualified institutional investors has noticed 8% subscription.
IPO | Happiest Minds Technologies Limited | 07-Sep-2020 to 09-Sep-2020— Tradeswift (@tradeswift) September 5, 2020
Tradeswift Recommendation : Please apply through all your Family Members Demat Accounts for Listing Gains.#IPO #happiestminds #Investment #NSE #BSE #Tradeswift pic.twitter.com/76pQt9ou2o
It plans to raise Rs 702 crore at the top end of the IPO price group. Promoter Ashok Soota will market 8,414,223 equity stocks and private equity fund CMDB-II will provide 27,249,362 shares throughout the offer-for-sale route.
On Saturday, the IT firm said it obtained Rs 316 crore from anchor shareholders ahead of its initial public offering (IPO). Government of Singapore, Goldman Sachs, Kuwait Investment Authority, Nomura Funds Ireland, Jupiter India and Pacific Horizon Investment were some of those anchor investors.
A total of 25 anchor investors were allocated 1,90,30,541 equity shares at the top price band of Rs 166 per scrip.
Happiest Minds IPO opens; here are 7 things to know
According to the management 76% of this business was not impacted by Covid 19 pandemic that’s a positive for long term. According to FY20 EPS, the P/E works out to be 26x that is close to big cap IT players. Given the powerful direction as Ashok Soota, co founder of Mindtree being the promoter and potential for expansion in the digital space post the pandemic era and attractive valuation, we recommend a research rating about the IPO for long-term outlook.”
Abhimanyu Sofat, Head of Research at IIFL Securities said,”This is a unique company since 97% of this business is digital as most other similar listed companies continue to be largely dependent on legacy enterprise. We are very positive on the future prognosis of Happiest Minds considering it trades at a discount to oriental European nations that have a similar profile. Pedigree of Mr. Ashok Soota gives added strength to the issue.”
Yash Gupta, Equity Research Associate, Angel Broking stated,”At the upper end of price group, shares are available at 23.6 times FY2020 EPS. Considering quite high exposure to digital services and robust promoter history, we anticipate that the company will continue growing at a faster rate when compared with similar sized businesses and consequently should command a premium valuation to the peer group. We’d therefore suggest SUBSCRIBE to the IPO.”
Abhijeet Ramachandran in Tips2trade stated,”Even though quite attractively valued concerning PE for a little cap IT stock and impressive growth in the previous two decades, we’d suggest caution for retail investors to register to the Happiest Minds IPO. Investors should await another two to three quarters to see whether the increase in earnings is renewable. This age will also help traders understand if the corporation can run easily or efficiently as now valuations seem to be based on the promoter’s track record and goodwill than the earnings growth.”
“Happiest heads Technologies is a strong brand in the electronic IT solutions space. Company derives 97 percent of its revenue from digital services while compared to 50% by its nearest midcap peer,” said Vinod Nair, Head of Research in Geojit Financial Services. The customer base of Happiest Minds consists of more than 35 Fortune 2000/Forbes 200 corporations, and repeat clients donated around 90 percent of their revenue. Between fiscal year 2018-2020, the IT services firm reported a 22.8% CAGR rise in consolidated sales. The company had a positive operating cash flow within FY18-20, which climbed by 229.4percent CAGR to Rs 112 crore in the last fiscal year. “Over the years and currently during the ongoing outbreak of Covid19, the company has successfully implemented its business continuity strategies like to attain effective work-from-home practices to guarantee connectivity throughout the business,” the brokerage firm said in a note. The company management stated that 76% of the company was not affected by Covid 19 pandemic.
Advisors are predicting that in the wake of the outbreak, companies across the globe will look to speed up the upgradation of the digital infrastructure. “The international venture digital spend is predicted to be US$691 billion in 2019 and is anticipated to rise to US$2,083 billion by 2025 in a CAGR of 20.19 percent,” explained ICICI Direct. With 97 percent of its revenue coming in by the digital services section, Happiest Minds is well positioned to capitalize on this.
Subscribe to Happiest Minds Technologies: Arihant Capital https://t.co/xmuO0lPKyC— Praveen R K (@consultprowin) September 7, 2020
Happiest Minds contains three business segments; Product Engineering Services which, analysts estimate, is 51 percent of the revenue; Digital Business Solutions, which accounts for 27 percent of the revenue and Infrastructure Mgmt. & Security Services that generates 22% of their revenue.
The largest threat aligned with the business originates from the spread of this coronavirus and the uncertainty surrounding it. “The company’s revenues are highly dependent on a limited variety of industry verticals. Any decline in demand for outsourced services in those industry verticals could reduce revenues,” said ICICI Direct. Additionally the brokerage believes that Happiest Minds’ lack of getting long-term commitments with clients could hit the business enterprise.
Considering FY20 adjusted EPS of Rs6.2, the price band implies a P/E ratio of 26.6X, comparable to its larger mid-cap peers such as LTI, Mindtree and NIIT Tech, stated IIFL Securities. “If we annualize the Q1FY21 amounts and based on the EPS P/E proves to be 12x which is attractive in contrast to international in addition to domestic tech,” Vinod Nair added while advocating investors to subscribe with a long-term view.
Happiest Mind is a tiny sized IT services firm promoted by Ashok Soota, who’s also the Executive Chairman and Director of the company. Before founding Happiest Head in 2011, Soota was among the founding members of MindTree prior to that he was also the vice chairman of Wipro.
Company has strong presence in electronic technologies to drive growth for the company. In FY2020, 96.9 percent of firm’s earnings came from electronic services and is one of the greatest Indian IT companies.
The business is split into three business units viz.
The firm had 148 active customers as of Q1FY2021 with the talk of repeat business growth consistently over the year to account for a substantial portion of earnings indicating a high level of customer stickiness, said Yash Gupta.