JPMorgan PE fund-backed Happiest Minds gets bumper response to IPO
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Happiest Minds Technologies Ltd, which is backed by private equity fund JPMorgan CMDB II, received an astounding response to its initial public offering with strong demand across all investor categories.

The offering of about 23.26 million shares—excluding the anchor investors’ portion—received bids for nearly 3.51 billion shares. The book was subscribed nearly 151 times at the end of the issue, stock-exchange data showed.

The quota reserved for institutions and retail investors was subscribed nearly 77.5 times and 71 times, respectively.

The portion set aside for non-institutional investors, including corporate bodies and wealthy individuals, was covered nearly 351.5 times.

HNIs typically bid on the final day of a public offering to keep their IPO financing costs at a minimum. They borrow short-term capital from various avenues, barring banks, to fund their IPO applications and deploy only a small fraction of their own capital—called margin money—upfront.

The IPO was fully covered within a few hours of the issue opening on Monday and garnered more interest on the second day.

Last Friday, Happiest Minds raised Rs 315.9 crore ($43.13 million) from a bunch of anchor investors that included Singapore sovereign wealth fund GIC Pte Ltd.

The company is targeting a valuation of as much as Rs 2,438 crore through the IPO that comprised a fresh issue of shares worth Rs 110 crore and an offer for sale of shares worth up to Rs 592 crore by the company’s founder Ashok Soota as well as JPMorgan CMDB II.

The company turned profitable in 2018-19 with a net profit of Rs 14.2 crore on revenue of Rs 590.4 crore. It had reported a loss of Rs 22.5 crore for the year ended March 2018 on revenue of Rs 463 crore. Its consolidated net profit for 2019-20 jumped to Rs 71.7 crore on revenue from operations of Rs 698 crore.

JPMorgan CMDB II will fully exit its over five-year-old investment with handsome returns, VCCircle reported in June after the company filed its draft red herring prospectus with the capital markets regulator.

The IPO will result in 28.79% stake dilution on a post-issue basis. Soota's stake will fall to 40.89% from 48.83%.

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

Tags: Happiest Minds Technologies Ltd, JPMorgan CMDB II, IPO, Ashok Soota

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