At ₹371, Happiest Minds share price more than doubles on listing

While Happiest Minds Technologies (HMT) made a stellar debut with 123 percent listing gains, more than 90 per cent of the non-institutional investors, who had subscribed to the initial public offer (IPO), seem to have sold their entire holding on the first day. HMT closed with gains of 123.49 per cent at ₹371 against the issue price of ₹166.

Data show that little over 2.2 crore shares were marked for delivery on the BSE and the National Stock Exchange (NSE) on the listing day. The non-institutional portion, which mainly had retail and high networth individual (HNI) subscribers, consisted of 2.32 crore shares. If 2.2 crore shares were marked for delivery, it means that 95 percent retail and HNIs sold their holding on the first day, analysts said. Plutus Wealth Management, a London-based fund, bought 10 lakh shares.

“Savvy investors entered the IPO at a price to earnings (PE) multiple of 31 times based on financial year 2020. On listing, these investors exited at a PE of 68 based on the closing price of the share, which is what 95 percent delivery tells us. Now those who have bought the shares on Thursday, would want to exit at a PE of 84 times or more, which means the company’s share price has to rise to ₹450. Interesting times,” said Arun Kejriwal, Director, investment advisory firm, KRIS. Kejriwal has analysed the listing day data.

According to Kejriwal, the pattern was seen in past few IPOs this year where IPO investors got out on the listing day.

HMT became the third top company in over three years to have delivered stellar listing gains. Salar Technologies listed in 2017 and Indian Railway Catering and Tourism Corporation (IRCTC) were the only other companies to have delivered higher listing gains than HMT.

Salsar Technologies gave listing gains of 152 percent and IRCTC 127 percent to investors. Avenue Supermart, the promoter of D’Mart, gave listing gains of 114 per cent in 2017. Other companies that delivered good listing gains during the period include CDSL that rose 75 percent, Rossari Biotech 71 per cent, Apollo Micro 65, Dixon Technologies 63 per cent and AU Small Finance Bank 51 per cent.

HMT is a small-sized IT services company promoted by Ashok Soota, former Vice-Cairman of India’s leading tech giant Wipro. The IPO size was ₹702 crore and it was over subscribed by 150.98 times.

HMT is among the top 10 most subscribed IPOs in around three years. Earlier, Dmart (104 times), CDSL (170 times), Salasar Techno (277 times), Captiate Infra (183 times) and Aston Paper (243 times) were the most subscribed IPOs of 2017. In 2018, the highest subscribed IPOs included Apollo Micro Systems (248 times) and Amber Enterprises (165 times). IRCTC (112 times) and Ujjivan Small Finance (165 times) were the most subscribed IPOs in 2019.

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