Choice Equity Broking IPO report on Happiest Minds Technologies
Bengaluru headquartered IT services firm, Happiest Minds Technologies Ltd. (HMTL), is planning to raise up to Rs. 7,000mn through an IPO, which will open on 07th Sept. and close on 09th Sept. 2020. The price band is Rs. 165 - 166 per share. The issue is a combination of fresh (Rs. 1,100mn) and OFS (Rs. 5,884.5 - 5,920.2mn). The company will not receive any proceeds from the OFS portion. Of the net proceeds from the fresh issue, Rs. 1,010mn will be utilized to meet long term working capital by the company. Rest of the amount will be utilized for general corporate purposes.
Valuation and Outlook
There are international peers, who derive almost all of their revenue from digital services are trading at a P/E multiple ranging from 67-139x. Assuming the valuations of these companies in the US markets to be frothy, the valuation demanded by HMTL seems to be attractive. Thus based on the above observations, we assign a “SUBSCRIBE” rating for the issue.
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