Happiest Minds Technologies initial public offering (IPO) of Rs 700 crore was subscribed almost 3 times on Monday, the first day of issuance.
Most of the offers came from individual investors, with the retail investor portion receiving a subscription of 14.6x. The qualified investor and wealthy investor portions subscribed at 8 percent and 62 percent, respectively.
Most offers for an IPO are generally made on the last day. However, this was the highest first day subscription for an IPO this year. The previous IPO, that of Rossari Biotech, was subscribed to 60 percent on the first day. He went on to get an 85x subscription. Market players said Happiest Minds will see a similar over-subscription as well. On Friday, the company allocated shares worth Rs 316 crore to anchor investors. Part of the reason for the huge retail oversubscription is that only 10 percent of the shares are reserved for them. Typically, one-third of the issuance in an IPO is reserved for retail investors, those who request shares worth less than Rs 200,000.
Happiest Minds is promoted by Ashok Soota, the founding president of MindTree. The firm is dedicated to digital IT services, with offerings such as cloud, SaaS, security, analytics and IoT. Through the IPO, Happiest Minds is looking to raise Rs 110 crore in fresh capital. The issue comprises a secondary sale of shares worth Rs 590 million. The price band for the IPO has been set at Rs 165 to Rs 166 per share.
At the higher end, the company is valued at Rs 2,440 crore on a post-dilution basis. “At the upper end of the price band, the issuance is valued at 29 times its FY20 P / E (fully diluted), which is comparable to larger mid-size IT companies. We like the firm, given its presence in digital services, scalable model with end-to-end capabilities and the improvement of financial performance, ”said a note from Motilal Oswal.
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