Bengaluru-based IT firm Happiest Minds is confident that its initial public offering (IPO), right in the middle of the Covid pandemic, will be a resounding success.
Founder Ashok Soota, 76, says the company’s growth and profitability will ensure investors make a beeline for the public issue.
The IPO opens on September 7 and closes on September 9.
Happiest Minds has fixed the price band of the public issue at Rs 165-166 per share.
The IPO consists of a fresh issue of Rs 110 crore, which the company wants to use for working capital purposes.
The public issue will also have an Offer for Sale component of up to 3.56 crore equity shares by the promoters — 84,14,223 shares will be put on the block by Soota, and 2,72,49,362 shares by investor CMDB II, a private equity fund managed by JP Morgan Investment Management Inc.
Familiar territory for Ashok Soota
Happiest Minds was founded in 2011 by IT veteran Soota, who co-founded Mindtree. He was also the President of Wipro Infotech between 1985 and 1999.
This will be the second IT firm Soota takes public after Mindtree.
Addressing the media, Soota said: “Although the pandemic was going to have an impact, there were two things working in our favour. The fact that we could see our profitability improving, and what we have delivered in Q1 compared to what the industry did.”
“This confidence is what led us to take this decision at this point in time,” he added.
Happiest Minds grew 19 percent year-on-year in FY20, at 714 crore, as opposed to Rs 602 core in FY19. The Indian IT industry grew about 8 percent during this period.
In addition, close to 97 percent of the firm’s revenues are from Digital, which is one of the key growth drivers for the industry. Top IT firms currently earn 35-40 percent of their revenues from the Digital segment.
Soota said that despite the pandemic, 76 percent of the company’s business remained unaffected and it has limited exposure to the travel and hospitality segment.
The edu-tech and hi-tech segments are one of the company’s largest revenue generators and account for about 42 percent of its revenues.
Happiest Minds has also been investing in next-gen technologies such as robotics and blockchain.
Acquisition is an area the company will focus on post the IPO.
Happiest Minds also wants to improve its share in the European market. The US accounts for about 77.5 percent of its revenue and the UK, 7.2 percent. Soota said the company bagged large deals from Europe last year and hence this would be a focus area.