Happiest Minds Technologies Ltd IPO (Happiest Minds IPO) Details

Add to Calendar 2020-09-07 12:00 AM 2020-09-09 12:00 AM Asia/Kolkata Happiest Minds Technologies Ltd IPO (Happiest Minds IPO) Details Happiest Minds Technologies Ltd India

Happiest Minds Technologies Ltd is coming up with an IPO with a price band of Rs 165-166 per share and a share lot of 90 shares. The company plans to raise Rs 110 crore (fresh issue) + Rs 592 crore (offer for sale of existing shares) totaling to Rs 702 crore. It intends to spend the amount towards fulfilling working capital requirements of about Rs 101 crore and for other general purposes. However, there are a number of red flags that are elaborated below and hence investors should avoid this IPO for now.

Happiest Minds’ core business includes digital, product engineering, infrastructure management, and security services. Along with these services, it also offers a wide spectrum of various digital technologies such as Robotic Process Automation, Software-Defined Networking/Network Function Virtualization, Big Data and advanced analytics, Internet of Things, cloud, Business Process Management, and security.

As of June 30, 2020, Happiest Minds had 148 active customers. Its repeat business (revenue from existing customers) has steadily grown with 92% of revenues from repeat business and contributed a large portion of its revenue from contracts with customers over the years indicative of customer stickiness. The attrition rate for the company stands at 18.7%.

The company derives the highest share of revenues from the Edu-tech and Hi-tech businesses, which contribute to about 42% of revenues (47% in June 2020) and is expected to rise in share. The rest of the share comes from BFSI (17.5%), Travel & Media, Retail and Industrial segments. About 76% of the revenue segments were unaffected by COVID-19 while the rest 24% were impacted. The most impacted segment of Travel forms a limited part of the revenue share for the company.

In FY 2018, 2019 and 2020, The total income was Rs 489.1 crore, Rs 601.8 crore and Rs 714.2 crore, respectively, the EBITDA was Rs 7.6 crore, Rs 66.3 crore and Rs 113.1 crore, respectively and the restated profit / (loss) for the year was Rs (22.5) crore, Rs 14.2 crore and Rs 71.7 crore, respectively. This represents a CAGR for total income of 20.8%.

Reasons to Avoid the IPO

The company is engaged in digital business and generates 97% of revenues from this segment. While this is good for the company, all IT companies have been scaling up their digital service suite and revenues, thereby providing for a stiff competition against Happiest Minds.

Happiest Minds carries very high debt on their books compared to other IT players; their debt-to-equity ratio is at 0.92 as of FY20. The company also reported negative equity in FY18 and FY19 which has now turned positive. 

As per the management, most of the debt is towards working capital loans and the funds raised in IPO will be utilized to pay this off. A key point to note is the fact that the current liabilities are very high at Rs 211.6 crore and even after the fundraise investors will have to closely monitor the situation.

Promoters have raised a 30% (42Mn shares) pledge on equity shares in 2019 to raise Rs 40 Crore. While the management has stated that the pledge will be removed concurrently with the IPO, further details were not given on the same.

From a valuation perspective, Happiest Minds trades at a P/E of 23x which is fair but given its growth trajectory is unclear due to the higher debt levels, higher than average working capital requirements and shareholder pledge, we recommend investors to avoid this IPO.

You can also checkout an exclusive analysis by our research analyst Mr. Anuragh Lodha in which he has shared some interesting business insights and his opinion about this issue. Click here to watch now.

Source: Company Filings

Issue Detail

  • Issue Open: Sep 07, 2020
  • Issue Close: Sep 09, 2020
  • Issue Type: Book Built Issue IPO
  • Face Value: Rs. 2 per equity share
  • Price Band: Rs. 165 to Rs. 166 per equity share
  • Bid Lot:90 Shares
  • Minimum Order Quantity:90 Shares
  • Listing At: BSE and NSE
  • Issue Size: • 42,290,091 Eq Shares of Rs.2 (aggregating up to Rs. 702.02 Cr)

Current Bidding Status

Number of Times Subscribed (BSE + NSE)
As on Date & Time QIB NII RII Employee Others Total

Listing Day Trading Information

Issue Price - -
Open - -
Low - -
High - -
Last Trade - -
Volume - -

Happiest Minds Technologies Ltd Red Herring Prospectus

Happiest Minds Technologies Ltd User Rating


Happiest Minds Technologies Ltd Life IPO Reviews

Happiest Minds Technologies Ltd IPO News & Updates

Frequently Asked Questions

Yes, you can always trade an IPO through a discount broker. Buying & selling an IPO becomes very easy once the trading and the demat account are set up appropriately.
Following are the benefits in buying and selling an IPOs through a discount broker. Reduced Brokerage Fee: Discount brokers charge a flat brokerage which is missing in case of full service brokers. Full service brokers usually charge %age brokerage and this incurs a lot of cost to an investors. So if any full service broker charge a brokerage of let say 0.03% then on a purchase of shares of worth of Rs 200,000 you end up paying Rs 600+ Taxes. In our case we charge a flat brokerage of Rs 20 + Taxes. Discount brokers therefore saves a lot of money of investors. Better Trading Platform: Usually discounts brokers don’t provide a good trading platform and experience but there are few discounts brokers like Samco, who are now focussing on delivering a world class trading platform and top notch user experience. Therefore narrowing down the gap between discount brokers and full service brokers.
Technically Speaking, SEBI has made mandatory to buy an IPO through ASBA channel but there is no regulation on how any investor can sell an IPO allotted shares. Therefore, smart investors can always sell IPO allotted shares through a discount broker


Start IPO Trading through SAMCO

Don't have a Trading Account !!!
Open an account with Samco and Do IPO Trading for Just Rs 20. For more details, share your contact details with us