BENGALURU: At a time when India’s IT services industry witnessed a slump in growth reeling under COVID pandemic, Bengaluru based tech firm, Happiest Minds, has decided to go public with the launch of its Rs 700-crore Initial Public Offering (IPO) on September 7.
The offer comprises of a fresh issue of Rs 110 crore (Fresh Issue) and an offer for sale aggregating up to 35,663,585 equity shares, which includes 8,414,223 equity shares by Ashok Soota, co-founder and Director, Happiest Minds and 27,249,362 equity shares by CMDB II (a venture capital fund).
Ashok Soota, an IT industry veteran who co-founded Happiest Minds in 2011, said that the company has been growing at a compounded annual growth rate of 20.8%, from FY18-20, higher than the industry average and has clocked 97% of its revenues from the digital businesses alone, unlike its peers in the sector.
The company's revenues for FY20 stood at Rs 714.2 crore. He added that nearly 76% of the company's business remained unimpacted by the COVID disruption, thanks to the fact that the company has the least presence in sectors like travel, hospitality which suffered heavily. He added that even as Q1 FY21 witnessed a flat growth due to the COVID impact, the profitability was better than peers which led the company to go public in the middle of a pandemic.
Soota who had co-founded mid-size IT firm Mindtree in 1999, helped it get listed in 2007. Before MindTree, Soota served as the President of Wipro Infotech helping it scale up the IT business revenues.
"Happiest Minds will use the net proceeds from the Rs 110 crore fresh issue for its working capital requirements and strengthening balance sheet for strategic decisions,” Soota added.
The Bengaluru-based tech firm's EBITDA margin grew by 285%from FY 18 (1.6%) to FY20( 15.8%). US accounted for 77.5% of the company’s overall revenues followed by India(11.9%) and UK(7.2%), according to the company financials. Edutech and hi-tech verticals accounted for nearly 40% of the tech firm’s revenues.
Bids can be made for a minimum of 90 equity shares and in multiples of 90 equity shares thereafter. The face value of the equity shares is Rs 2 each.
ICICI Securities Limited and Nomura Financial Advisory and Securities (India) Private Limited are the book running lead managers to the Offer (“BRLMs”). KFin Technologies Private Limited is the registrar to the Offer, the company said in a statement.