Happiest Mind Technologies Ltd. (“HMTL”
or “the Company”) is a Bangalore-based IT services company which was started in
2011 by Mr Ashok Soota, an industry veteran, who has a very impressive profile
with 30 year’s experience in the field of IT services.
Promoter’s Profile
Mr Ashok Soota is the executive chairman of HMTL, a former vice chairman at Wipro Ltd. for the period 1984-1999, he led it to become one of the leading IT services company in India. He later founded mid-size IT services company Mindtree Ltd. in 1999 and went to launch its IPO in 2007, which was a massive success. The IPO was subscribed over 103 times.
Business Model:
1.
The company has three main business segments:
* Digital business service
* Product engineering
service
* Infra Management and security services
2.
For instance: If any company wants to expand its digital
presence or wants to build an app or want to build a security system, etc. In-short
all the IT related services which a company would need is been provided by HMTL.
3.
It has all together 157 active customers as on March 31, 2020,
and has a strong grip in countries such as the US, UK, Australia, Canada and
the Middle East.
4.
Most importantly It has a diversified customer base and caters
mostly to the following sectors: Retail, Edu-tech, Banking and financial
services, Hi-tech, Engineering, Research and development, Manufacturing, Travel,
Media and entertainment.
5.
The company has some big names on its partner's list including
Microsoft, Amazon Web services, McAfee, IBM, and many more. To be specific the
company deals with 37 out of Fortune 1000 companies.
6.
The future is all about Digital, Artificial intelligence and Blockchain
technology where the Company has a lot of focus and is willing to grow in the
said segment. The business units of HMTL is assisted by three centres of
excellence which are internet of things, analytics/artificial intelligence, and
digital process automation.
Strong Financials:
The company’s total revenue for the
FY20 was Rs.698 crores as compared to Rs.590 crores in FY19 and Rs.462 crores
in FY18. The company’s net profit has increased from negative Rs.22.5 crores in FY18
to Rs.71.71 crores in FY20. No doubt the company has been successful in scaling up its
business over time and obviously with an exceptional margin of over 20%.
Business Performance and Vision:
1.
As per the axis capital report, the company’s major revenue is
coming from the digital services business, to be specific almost 96.9%, which
is one of the highest among Indian IT companies, as per the reports other peer
companies generate only around 35% to 40% of the revenue from digital services
segment. To conclude, HMTL has a very stronghold in the digital segment and it
could be one of the key growth drivers for the company in the future.
2.
Edu-tech and high-tech sectors contributed around 42% of the
company’s total revenue, which is the largest among all the sectors, the
company caters to.
3.
As per Mr Soota, despite the pandemic, 76% of the company’s
business remained unaffected and it has limited exposure to the travel and
hospitality segment, which were the most impacted during the lockdown.
4.
HMTL has been investing in Next-Gen Technologies such as Robotics
and Blockchain which are considered as the future of the IT industry.
5.
The company is looking to expand its business in the European
market. As the US accounts for 77.5% of its revenue and the UK accounts for only
7.2%.
Happiest Minds IPO details
|
Bid/ offer opens on |
Sep 7, 2020 |
|
Bid/ offer closes on |
Sep 9, 2020 |
|
Finalisation of Basis of allotment |
Sep 14, 2020 |
|
Initiation of refunds |
Sep 15, 2020 |
|
Credit of shares to Demat Account |
Sep 15, 2020 |
|
IPO shares listing date |
Sep 17, 2020 |
|
Issue size |
4,22,90,091 Eq. shares of Rs.2 each (Aggregating up to Rs. 702.02 Cr.) |
|
Fresh issue |
66,26,506 Eq. shares of Rs.2 each (Aggregating up to Rs. 110 Cr.) |
|
Offer for sale |
3,56,63,585 Eq. shares of Rs.2 each (Aggregating up to Rs. 592.02 Cr.) |
|
Face value |
Rs.2 per equity share |
|
IPO price band |
Rs.165 - Rs.166 per eq. Share |
|
Market lot |
90 Shares |
|
Minimum order quantity |
1 Lot (90 Shares) |
|
Maximum lot |
13 lot |
|
Listing at |
BSE, NSE |
Pros:
1.
The Company is in the IT sector which is poised to grow and have
given handsome returns even during COVID-19 pandemic. TCS, Wipro, Infosys are
its proofs.
2.
The Company is growing at an average rate of 20% p.a.
3.
One of the most important factors is the face of the company
i.e. the promoter. Mr Ashok Soota is an ethical and a successful businessman
and as discussed he has an amazing experience in this industry
4.
Strong fundamentals
Cons:
1.
IT services is a very competitive sector. Many big players such
as Infosys, Wipro, TCS, etc are also willing to expand their digital service
segment which might be a threat for happiest minds as this large peer companies
have better infrastructure, clients and huge funds as compared to Happiest
Minds.
2.
Foreign currency risk: Around 75% Of the total revenue of
happiest minds comes from the US market, which means any major dollar rupee
fluctuation might affect the top line of the company
3.
High dependence on the US market.
Disclaimer:
The
above views and opinion are just for educational purpose, please consult your
financial advisor before making any investment.
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