Happiest Minds Tech IPO: Brokerage Views

This post on Happiest Minds Tech IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Happiest Minds Tech IPO or not.

Related Posts : Happiest Minds Technologies IPO Review

Happiest Minds IPO: Grey Market Premium etc.

  • 08-09-20 GMP 130
  • 07-09-20 GMP 130
  • 04-09-20 GMP 100, Kostak 450-500

Subscription: Happiest Minds IPO ( x times)

Day / X timesQIBNIIRetailTotal 
Day 3    
Day 20.473.9638.858.40
Day 10.080.6214.612.87
Total  Applications ~ 1188196
Appl wise Retail : 25.29 x

Consolidated Brokerage Views on Happiest Minds IPO

Business Standard: “Happiest Minds IPO is likely to be a good opportunity for investors. Sturdy profitable growth potential, led by 97 per cent revenue contribution from the digital business, which is also highest amongst the listed Indian IT players, would bode well for the IPO.”

Capital Market : ” Score 51/100 ; Consolidated revenues of Rs 698.21 crore in FY 2020 translated into a growth of 18%. Higher sales together with 460-basis-point expansion in the operating profit margins resulted in 77% jump in operating profit to Rs97.10 crore. After accounting for higher other income, lower interest and depreciation, profit before tax was up 232% to Rs 84.87 crore. Eventually, net profit surged a whopping 405% to Rs 71.71 crore, driven by lower extraordinary expenses (EO) on impairment of goodwill.  The consolidated EPS adjusting for EO on post-issue equity of Rs 29.37 at the lower price band and Rs 29.38 at the upper price band works out to Rs 5.6 for FY 2020. The asking price of Rs 165-166 discounts the EPS 29.5-29.6 times. The nearest comparable peer Mindtree quotes at a P/E of 31.5 times FY 2020 EPS. “

Choice Broking: “At the higher price band, the issue seems to be fully priced as compared to its domestic peers. HMTL earned an average
97.1% of the revenue from digital IT services as compared to its domestic peers, which earned in the range of 30-50%. Thus the company cannot be fully comparable to the domestic peers. There are international peers, who derive almost all of their revenue from digital services are trading at a P/E multiple ranging from 67-139x. Assuming the valuations of these companies in the US markets to be frothy, the valuation demanded by HMTL seems to be attractive. Thus based on the above observations, we assign a “SUBSCRIBE” rating for the issue.”

GEOJIT (Analyst View): “The pricing of the issue is very high. On a long-term basis, the stock may not be very attractive. But given the strong growth shown by the company in FY20, and huge demand for midcap and smallcap IT stocks these days, risk-taking investors can consider the issue for a short-to-mid term basis”

HEM Securities: ” Company is bringing the issue at p/e multiple of approx 12x at higher end of price band of Rs 165-166/share on post issue annualized Q1FY21 eps basis. . Company has shown strong growth in its financials in last couple of years. Company is strong brand in digital IT services with growing high revenue generating customer accounts with a high proportion of repeat revenues and revenues from mature markets .We like the scalable business model of company which has multiple drivers of steady growth with experienced leadership focused on sound corporate governance practices. Therefore, looking after all, we recommend “Subscribe” the issue both for short & long term horizon..

IDBI Capital (Analyst): “There is immense growth opportunity in the digital business as many businesses are undergoing digital transformation. This presents strong growth opportunities for Happiest Minds going ahead. Thus, we believe the IPO brings good opportunity for investors.””

KR Choksey: “Given HMT’s growth profile and >97% digital revenue share, we believe the company can comfortably command a PE of 24x-25x, which makes the IPO valuation fairly attractive for long term investors. We recommend a subscribe to the issue, with the potential for healthy listing gains as well as long term stock price appreciation. “

Motilal Oswal : “At the higher end of the price band, the issue is valued at 29x FY20 P/E (fully diluted), which is comparable to larger mid-sized IT companies. We like the company given its (1) strong presence in digital services, (2) scalable business model with end-to-end capabilities and (3) fast improving financial performance. Hence, investors can Subscribe to the IPO. Further considering market conditions and bright prospects for IT companies post Covid-era, one may also get listing gains.”

SMC: “Score 3/5 ; The company is a versatile digital business, product engineering and infra management solutionprovider company. Digital is growing much faster than traditional business of the company. As much as 97% of the company’s revenue comes from digital, where as the average contribution from digital stands at 40-50%. The company has adopted a mindful IT strategy for its future growth. On the flip side, the company intends to raise Rs 702 crore from the issue, of which 592 crore is offer for sale.”


Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above infoimration is collated from various online sources and is for educational purpose only. Please visit indidivual brokearge sites to read the actual reports. Please donot make ypur investkent decisions based on this info as it is not completre amd exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.

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