JP Morgan fund to fully exit as Happiest Minds Technologies files for IPO

By Ankit Doshi

  • 11 Jun 2020
JP Morgan fund to fully exit as Happiest Minds Technologies files for IPO
Credit: 123RF.com

Happiest Minds Technologies Ltd has submitted a draft prospectus to float an initial public offering (IPO), becoming the first company to file for a share sale since India locked down in late March to fight the coronavirus pandemic.

The proposed IPO comprises a fresh issue of shares worth Rs 110 crore and an offer for sale by the company’s promoter as well as private equity investor JP Morgan CMDB II, according to the prospectus filed with the Securities and Exchange Board of India. JP Morgan CMDB II will exit its over five-year investment in the technology solutions company.

The total size of the IPO is estimated at roughly Rs 700 crore, according to people aware of the matter.


The Bengaluru-based software services company plans to use about Rs 101 crore of the net fresh proceeds towards long-term working capital and the remaining portion for general corporate purposes.

The proceeds from the secondary sale will go to the selling shareholders.

This is the first major IPO filing in India after the government imposed a nationwide lockdown in late March. Apart from the human cost, the pandemic has led to unprecedented disruption of businesses, commerce, travel and trade worldwide.


CX Partners-backed restaurant chain Barbeque Nation Hospitality Ltd was the last company to file its IPO proposal with SEBI. The company refiled its draft prospectus on February 17, after its earlier attempt hit regulatory hurdles and unfavourable market conditions.

National Commodity & Derivatives Exchange Ltd (NCDEX), backed by mid-market private equity firms Investcorp and Oman India Joint Investment Fund, filed for an IPO on February 12 as it sought to become the third bourse in India to go public. NCDEX is India’s largest agricultural commodity derivatives exchange.

In an interview with VCCircle last month, EY India’s Sandip Khetan said he expected primary market activity to be pushed back by at least six to nine months.


Here’s a snapshot of the proposed IPO by Happiest Minds Technologies:


The IPO comprises a fresh issue of shares worth Rs 110 crore besides a secondary sale of 35.66 million shares by Ashok Soota and JP Morgan CMDB II, which has proposed to sell the entire 27.249 million shares, or 19.43% stake.


Soota has been executive chairman and promoter of Happiest Minds since August 2011. Prior to Happiest Minds, Soota was founding chairman and MD of Mindtree (1999-2011). He was also president of Wipro’s technology business from 1984-99, going by his LinkedIn profile.

The total IPO size is estimated at Rs 700 crore ($92.4 million at current exchange rate). The IPO may value the company at around Rs 1,894 crore ($250 million) on a post-issue basis after accounting for fresh shares, VCCircle estimates show.

At least 75% of Happiest Minds’ IPO is reserved for institutional investors, or qualified institutional buyers (QIBs).


In a typical IPO, at least 50% of shares are reserved for QIBs while 35% for retail investors and 15% for non-institutional non-retail investors, namely, corporate bodies and high net-worth individuals (HNIs).


ICICI Securities and Nomura Financial Advisory and Securities (India) Pvt. Ltd are merchant bankers arranging and managing the share sale.


Khaitan & Co. is the India legal adviser to the company. 

Cyril Amarchand Mangaldas and Herbert Smith Freehills LLP are India and international legal advisers to merchant bankers.


Happiest Minds provides digital solutions to enterprises to help them deliver digital solutions to end-customers.

The company leverages a suite of modern-day technologies such as big data, analytics, robotic process automation (RPA), artificial intelligence and cognitive computing, Internet of Things (IOT), cloud computing, blockchain, and automation.

The firm had served 157 active customers as on March-end 2020. It caters to companies operating in industries or sectors such as retail, consumer packaged goods, ed-tech, e-commerce, banking, insurance, hi-tech, engineering R&D, manufacturing, automotive and travel, transportation, and hospitality.

The company operates across three main verticals -- digital business services, product engineering services, and infrastructure management & security services. Digital business services accounted for 96.9% of its total revenues for financial year 2020, according to its prospectus.


Happiest Minds turned profitable in the financial year 2019.

The company reported consolidated net profit of Rs 71.7 crore on revenue (from operations) of Rs 698 crore at the end of March 2020.

In financial year 2019, its net profit stood at Rs 14.2 crore on revenue of Rs 590.4 crore.

The company had reported a loss of Rs 22.5 crore for the year ended March 2018 on revenue of Rs 463 crore.

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