Happiest Minds shares trade at about 84% premium in grey market; IPO allottees stare at listing gains

After subscribing to Happiest Minds Technologies Initial Public Offering (IPO) 151 times, Dalal Street now eagerly awaits the primary market debut of the Bangalore based information Technology (IT) giant. Grey market participants say that the stock could list with massive gains, and even double the price band at which investors have subscribed to the IPO. “Grey market premium for Happiest Minds is above Rs 140. This is an indicative rate, pointing towards what the listing price could be,” Narottam Dharawat, founder, Dharawat Securities told Financial Express Online. The Rs 700 crore IPO of Happiest Minds was the best performing public issue of this fiscal year.

Happiest Minds IPO saw investors bid for 351 crore shares against the issue size of 2.32 crore. The IPO saw retail investors oversubscribe their quota in less than three hours of the issue opening for subscription. At the end of the three day bidding process retail investors subscribed their portion 70.94 times while Qualified Institutional investors (QIB) subscribed their portion 77.42 times. The biggest rush for investment came from Non-Institutional investors, who bid for the issue 351 times. 

While Narottam Dharawat is seeing a premium of over Rs 140 on Happiest Minds shares, above the price band of Rs 165-166, he adds that grey market is just the sentiment. On the other hand, Dinesh Gupta, Partner, UnlistedZone says the premium on Happiest Minds shares is of approximately Rs 150-152 per share. “This means that listing could be above Rs 300 per share,” Dinesh Gupta said. A premium of Rs 140 would take the opening price to Rs 306, translating to 84% gains. Happiest Minds IPO came at a time when analysts have been predicting a strong outlook for information technology players in the post-coronavirus world as digitalisation picks up pace. Happiest Minds Technologies derives 97% of its revenues from Digital IT services by offering services like cloud, SaaS, security, analytics and IoT, compared to 30-50% for traditional Indian IT services peers. 

Brokerage and research firm Motilal Oswal, earlier last week, while advising investors to subscribe to the issue said that it likes the company given its scalable business model with end-to-end capabilities and 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,” It has said in a note.