Incorporated in 2011, Positioned as “Born Digital. Born Agile” Happiest Minds Ltd is a Bangalore based IT service provider company. The business of the company is divided into three categories; Digital Business Service (DBS), Product Engineering Service (PES) and Infrastructure and Management Security Service ( IMSS). The article is about Happiest Minds Technologies IPO Review.
Happiest Minds Issue Details
| IPO Date | Sep 7, 2020 – Sep 9, 2020 |
| Issue Type | Book Built Issue IPO |
| Issue Size | 42,290,091 Eq Shares of ₹2 (aggregating up to ₹702.02 Cr) |
| Fresh Issue | 6,626,506 Eq Shares of ₹2 (aggregating up to ₹110.00 Cr) |
| Offer for Sale | 35,663,585 Eq Shares of ₹2 (aggregating up to ₹592.02 Cr) |
| Face Value | ₹2 per equity share |
| IPO Price | ₹165 to ₹166 per equity share |
| Market Lot | 90 Shares |
| Min Order Quantity | 90 Shares |
| Listing At | BSE, NSE |
| DRHP |
Competitive Strengths
1. Focused on software product development
2. Strong Brand in offering Digital IT services
3. End to End digital lifecycle
4. Agile Engineering and Delivery
Company Promoters:
Mr. Ashok Soota is the promoter of the company.
About the Company
As of June 30, 2020, it had 148 active customers with a global presence in countries like US, UK, Australia, Canada and the Middle East. It draws over 95% of its revenue from digital IT services.
In FY20, the company had reported revenues of ₹714 crore. This represents a CAGR for total income of 20.8% between FY18 and FY20. It has over 2,600 employees. In FY20, it had reported profit of ₹72 crore.
Risk Factors
The adverse effects of coronavirus may remain uncertain. Also, the company’s revenues are highly dependent on a limited number of industry verticals. Any decline in demand for outsourced services in these industry verticals could reduce revenues and materially adversely affect business, financial condition and results of operations.
More About the Company
The DBS unit offers digital application development & modernisation, assistance in designing & testing of operations, management of the platform, consulting and domain led offerings.
PES unit helps by transforming the potential of digital by making the product secure and smart. Wherein, IMSS provides an end to end monitoring and management capability for applications and infrastructure of the clients.
As of June 30, 2020, Happiest Minds had 148 active customers and has a global presence in countries like US, UK, Australia, Canada and the Middle East. The business units of the company is assisted by the 3 Centres of Excellence which are Internet of Things, Analytics / Artificial Intelligence, and Digital Process Automation. In Fiscal 2020, 96.9% of the company’s revenues came from digital services which is one of the highest among Indian IT companies.
Happiest Minds delivers services across industry sectors such as Retail, Edutech, Industrial, BFSI, Hi-Tech, Engineering R&D, Manufacturing, Travel, Media and Entertainment.
Company Financials:
| Particulars | For the year/period ended (₹ in Million) | |||
|---|---|---|---|---|
| 30-Jun-20 | 31-Mar-20 | 31-Mar-19 | 31-Mar-18 | |
| Total Assets | 5,730.8 | 5,081.5 | 4,135.2 | 3,869.9 |
| Total Revenue | 1,869.9 | 7,142.3 | 6,018.1 | 4,891.2 |
| Profit After Tax | 501.8 | 717.1 | 142.1 | (224.7) |
Objects of the Issue:
The company proposes to utilise the Net Proceeds from the fresh issue towards funding the following objects:
1. To meet long term working capital requirement; and
2. General corporate purposes
Happiest Minds Technologies IPO Review
So, the above chart contains the financial details of Happiest Minds Technologies. It shows the company is making a moderate profit throughout the years. Now, let us have a look at the prospectus of the company. Its EPS (earnings per share) stands at 8.17 (as of FY19 basic and diluted). The company has not revealed the PE (price to earnings) ratio. It’s RoNW (Return on Net Worth) and NAV/share are 23.08 and 35.37 respectively.
So based on these available data, Happiest Minds Technologies IPO Review carries a NEUTRAL view. It is advisable to avoid the IPO.
