Digital solutions provider Happiest Minds Technologies witnessed better-than-expected listing premium and more than doubled investors' money on its market debut on September 17.
The stock surged 123.49 percent to close at Rs 371 on the BSE and jumped 123.46 percent to Rs 370.95 on the National Stock Exchange.
It maintained its opening price of Rs 351 on the BSE and Rs 350 on the NSE throughout the session, while witnessing combined (BSE and NSE) trading volumes of over 6.29 crore equity shares, much higher than the total issue size of 4.22 crore shares.
Happiest Minds share price touched an intraday high of Rs 395 (up 138 percent over IPO price) on the BSE and Rs 394.95 on the NSE.
Also read: Happiest Minds shares surge 138% on debut to hit a high of Rs 395; what should investors do?
The Rs 702-crore initial public offering (IPO) of Happiest Minds Technologies saw a healthy subscription of 151 times during September 7-9, largely due to its presence in the digital business that has been growing fast, strong growth in financials and good management background.
The company's offerings include digital business, product engineering, infrastructure management and security services.
"The digital market has been growing at a faster pace than the traditional IT services, adding that the digital infrastructure accounts 97 percent of his company's revenue," Ashok Soota, the 77-year-old promoter of the IT firm said in an interview to CNBC-TV18.
Looking at this, Soota said that the company was likely to sustain its growth, which has been almost completely organic till now.
In FY20, 96.9 percent of the company's revenues came from digital services, one of the highest among Indian IT companies.
Also read: Happiest Minds listing | Company should be able to sustain its strong growth in years to come, says Ashok Soota
According to Frost & Sullivan Report, the legacy IT market as a percentage of total technology spend is estimated to decline from 85.7 percent share in 2019 to 65 percent share by 2025, with digital spend making up the remaining 35 percent share by then.
As of June 2020, the company had 148 active customers. Its repeat business from existing customers has steadily grown and contributed a significant portion of the revenue from contracts with customers over the years, indicating a high degree of customer stickiness.
Considering the very high exposure to digital services and strong promoter background and recent positive commentary by HCL Technologies, Yash Gupta-Equity Research Associate at Angel Broking expects the company to continue to grow at a faster pace as compared to similar-sized companies. Therefore, investors with a long-term perspective can remain invested in the stock, he said.