Ashok Soota Expects Happiest Minds To Grow 20% Annually
Ashok Soota expects Happiest Minds Technologies Ltd. to grow at an annualised rate of 20% compared with the industry as the mid-sized information technology firm earns almost all of its revenue from the margin-accretive digital segment.
“The IT market is growing at 8-10% annually,” the promoter and executive chairman of the company said in an interview with BloombergQuint. Digital revenue for Indian software services exporters, he said, ranges between 30% and 50%. While peers are on track to increase their exposure to this segment, Happiest Minds already earns 97% of its revenue from digital services, he said.
The company has launched its three-day initial public offering on Sept. 7. It plans to raise almost Rs 702 crore via fresh issue of shares and offer for sale by promoter Soota and shareholder CMDB II—a private equity fund managed by JP Morgan Investment Management. The public issue will close on Sept.9.
Happiest Minds, in its red herring prospectus, has said it will use the net proceeds from the maiden offer for long-term working capital and general corporate purposes.
Here are the key highlights from BloombergQuint’s conversation with Ashok Soota and Venkatraman N, executive director and chief financial officer at Happiest Minds:
- Next year, the industry is expected to grow more due to pent-up demand.
- The new opportunity in the IT space is for security solutions.
- The company aims to sustain attrition levels at 15%.
- In the quarter ended June, 2020, the company received most customer satisfaction communications than ever before.
- 76% of the company’s business comes from areas that are not impacted by Covid-19.
- 95% of client work is off-shore, which separates the company from its listed global peers.
- The company’s billing rates are higher than Indian IT service companies.
- Average revenue per customer has increased from $400,000 to $620,000 in the last two years.
- 92-93% business comes from repeat customers.
- Expected operating margins will be 21-22% for fiscal 2021.