Happiest Minds’ stock doubles in stellar debut, closes 123{bce2ac57dae147ae13b811f47f24d80c66c6ab504b39dda4a9b6e8ac93725942} above IPO price

Technologies had a stellar stock market debut on Thursday, with the IT firm’s shares closing 123 per cent above the IPO price.

Compared to the issue price of Rs 166, the stock closed at Rs 371 on the NSE, where shares worth Rs 1,945 crore changed hands.

This was the best debut for an IPO since in October 2019, when shares of the state-owned firm gained 127 per cent on day one. Further, this was among the best day-one performances for an IT company since HCL Technologies’ listing over two decades ago.

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The blockbuster listing for comes on the back of huge demand during its IPO last week, which saw 151x subscription.

It was also a happy day for 77-year-old founder and Chief Executive Officer Ashok Soota, who started the firm less than a decade ago.

Soota’s 40.9 per cent stake is now valued at Rs 2,228 crore. Incidentally, the entire company was valued at Rs 2,438 crore at the IPO price. In the IPO, Soota sold 8.4 million shares to mop up nearly Rs 140 crore. The total promoter holding in the company after the IPO stands at 53.25 per cent.

Mindtree, another company set up by Soota, had gained 46 per cent during its stock market debut in 2007. Following the sharp gains on debut, analysts turned cautious on the stock.

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“At current levels, the stock is trading at 54x its FY20 earnings, which is significantly higher than industry peers. From a long-term perspective, digital business will be the key growth driver for the IT sector, and is positioned to take full benefit of the same given the company derives 97 per cent of its revenues from digital services. While we expect Happiest Minds to grow ahead of the industry, the current valuations are demanding,” said Yash Gupta, equity research associate, Angel Broking.