Ashok Soota, pioneer of India’s information technology services industry, has led three outsourcing companies, including one of the largest in the country, Wipro Ltd., and has gone public with two of them.
The second was this week when the initial public offering of its latest startup, Happiest Minds Technologies Ltd., received more than 151 subscriptions. The IPO received offers for 3.51 billion shares compared to 23.3 million on offer, ranking it among India’s most successful first-time share sales of this decade.
“The IPO received a boost from the credibility of the founder,” said Abhimanyu Sofat, head of research at IIFL Securities Ltd. in Mumbai. “That contributed to investor confidence and led institutional and foreign investors to want a piece of the pie.”
Happiest Minds, which derives almost all of its income from digital services, is one of two IPOs this week to attract Indian investors. An offering from Route Mobile Ltd., a cloud infrastructure provider, was oversubscribed four times late Thursday as the global tech stocks frenzy spreads to even the smallest companies.
The huge demand from both companies bodes well for the Indian IPO market, which has only seen two main board offers in 2020 despite a buoyant stock market. The S&P BSE Sensex is up roughly 50% from a March low, even as the country experienced its worst economic contraction on record in the June quarter and is the new global virus hotspot.
“The oversubscription reflects the premium that most of the Indian market is trading at,” said Deepak Jasani, head of research at HDFC Securities Ltd. “The Happiest Minds IPO price was quite reasonable and left something on the table. for investors “.
Digital focus
The Happiest Minds shares sold in a price range of Rs 165-166 ($ 2.3) each. Soota raised Rs 1.4 billion by selling part of its stake. The sale closed on Wednesday and the shares are likely to begin trading next week. Route Mobile’s IPO concludes later on Friday.
Soota, 77, founded the Bengaluru-based startup in 2011. The company followed an acrimonious split from the co-founders of his previous startup Mindtree Ltd., which he had gone public in March 2007. That IPO was oversubscribed more. than 100 times.
Happiest Minds expects to expand at an annualized rate of 20%, nearly double the industry growth rate, Soota told BloombergQuint on Sept. 7. The company derives 97% of its revenue from digital services, compared to 30-50% from its local peers. , according to a report by Motilal Oswal Securities Ltd.
Soota declined to comment on the Bloomberg News inquiries, citing compliance requirements.
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