Happiest Minds IPO receives overwhelming response

The technology service industry veteran, Ashok Soota spearheaded three companies which included Wipro, and took two of them public.

The second and the recent company which went public with the initial public offering (IPO) is the startup, Happiest Minds Technologies. The IPO was oversubscribed 151 times. The IPO got bids for 3.51 billion shares versus the 23.3 million on offer, ranking it among India's most successful first-time share sales of this decade.

“The IPO got a boost from the credibility of the founder,” said Abhimanyu Sofat, Head of Research at IIFL Securities in Mumbai. “That added to investor confidence and led to institutional and foreign investors wanting a piece of the pie.”

Apart from Happiest Minds, an offering from Route Mobile was also oversubscribed 73 times on the last day of the sale as the frenzy for technology stocks globally rubs off on even the smallest of companies.

The huge demand for both the companies bodes well for India's IPO market, which has seen only two main board offerings in 2020 despite a buoyant stock market. The S&P BSE Sensex is up about 50 per cent from a low in March even as the country saw its worst economic contraction on record in the June quarter and is the new global virus hotspot.

“The oversubscription reflects the premium at which most of the Indian market is priced at,” said Deepak Jasani, Head of Research at HDFC Securities Ltd. “The Happiest Minds IPO pricing was quite reasonable and left something on the table for investors.”

The shares of Happiest Minds were sold at a price range of Rs 165-166 ($2.3) apiece. Soota bagged an amount of Rs 140 crore by selling part of his stake. The shares are likely to begin trading next week.

Soota, 77, founded the Bengaluru-based startup in 2011.

Happiest Minds expects to expand at an annualized rate of 20 per cent, almost double the industry growth rate, Soota told. The company gets 97 per cent of its revenue from digital services, compared with 30-50 per cent for its local peers, according to a report by Motilal Oswal Securities.