3 min read
. Updated: 17 Sep 2020, 09:50 PM IST
The success of Ashok Soota’s Happiest Minds IPO speaks of his entrepreneurial reputation. It’s also a signal that investors are raring to bet on new ventures. That’s good for startups
Going by its stellar stock market debut on Thursday, Ashok Soota’s Happiest Minds Technologies more than justifies its name. The Bengaluru-based infotech company’s shares opened for public trading at more than twice their issue price of ₹166 apiece. Those who had subscribed to the initial public offer (IPO), which opened on 7 September to raise a little more than ₹700 crore, were no doubt delighted. With such enthusiasm among investors for entrepreneurial ventures in the field of digital services, Soota could easily have raised more money. It is likely that his reputation was a big draw in itself. At the age of 77, he is seen to possess not just deep reservoirs of experience, but also that highly prized attribute of successful entrepreneurs—resilience against all odds. Once an entrepreneur, as they say, always an entrepreneur, ever ready to spring right back. And it is this irrepressible spirit that the country needs right now against our current covid crunch.
Soota’s record suggests that he has never been too fond of comfort zones, nor daunted by the idea of starting all over. On the eve of the new millennium, he had quit as the chief of Wipro’s tech business to set up MindTree, a software firm. Having made a go of that, a reported falling out with a few co-founders led him in 2011 to his latest gig. Happiest Minds maintained something of a low profile for years, but is finally in the spotlight now as his bounce-back vehicle. Optimism over its post-pandemic prospects clearly runs high. Of the 23.3 million shares on offer, it got bids for over 3.5 billion—an oversubscription ratio of 151. In the process, Soota got ₹140 crore for the equity that he parted with. His previous startup, MindTree, is now owned by Larsen & Toubro (L&T), which mounted a hostile takeover after the company underwent some turbulence that left it vulnerable.
How well Soota’s new investors are rewarded will depend on the performance of Happiest Minds as we go along. Some tech sector equity analysts have not been very impressed with what they have seen so far. Its revenue grew at a compounded annual rate of 17% in dollar terms in the last two fiscal years, compared with, say, L&T Infotech—an entity distinct from MindTree—which recorded a 30% growth in digital revenues on a larger base. Thus, the success of Happiest Minds’ IPO can partly be traced to a retail frenzy that seems to have gripped Indian equity markets, as reflected in the 50% run-up in the BSE Sensex since its March lows, an upsurge accompanied by a rush to open new demat accounts for stock trading. A global clamour for technology stocks might have had a rub-off effect on the IPO as well. However, if big-time change is upon us, many might simply have reckoned that adaptability and courage are what count. Few can predict which way the pandemic dice will roll. It could well turn out that we are at an inflexion point, as tech seers like to say, one that could make or break fortunes. In times like these, a high risk appetite among investors at large is a good sign for the country’s startup ecosystem, considered the world’s third largest by its count of unicorns—defined as new ventures valued at $1 billion or more. We could have many more. Lots of fresh ideas and businesses need to emerge. They all deserve a chance. Only a few may succeed, but their success would make it all worth it.
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