There will never be a threat of hostile takeover in Happiest Minds: Ashok Soota

There will never be a threat of hostile takeover in Happiest Minds: Ashok Soota



Being 97% digital, we are growing at a faster rate, a compounded 20% plus as compared to 8-10% for the larger IT players today, says Ashok Soota, Executive Chairman & Director, Happiest Minds.


Congratulations firstly on a stellar listing. There has been a very strong response from investors of over 100% gains on the listing day alone. How does it feel and what is the way forward for the company post this very strong listing?

All of the people who helped to make the IPO successful and that obviously includes our bankers, legal counsel, auditors, board members and mostly our wonderful team to whom I would like to dedicate this IPO. Now in terms of how it feels, I do have mixed feelings from the moment we have had this huge response. There is always this feeling that there is going to be disappointed people who applied and did not get their shares and you can see this from social media comments etc.

The second aspect is that of course it creates a responsibility on the teams to be able to deliver on expectations that it creates and to that extent, it is a challenge and a challenge is something that we must look forward to and see how we move forward in our general footprint.

The mega trend post Covid appears to be the mass acceleration of adoption of technology. In your case, 97% revenues are coming from IT services and a lot of it is digital. At the industry level, what is the kind of opportunity for an IT services company like yours?
I should clarify and make a distinction between what you call a broader IT services market and the digital part of the IT services market. We are born digital, born agile, 97% of our business comes from digital and the traditional IT market is growing much smaller and that is why we are able to grow at a faster rates — say a compounded of 20% plus as compared to about 8% to 10% for the larger IT players today.

I would imagine that when you said that the IT services business is growing, it is the entire market typically and slowdowns and recessions and more so in this one where everything is becoming virtual, IT will definitely grow faster within that. The transformation towards digital will also get accelerated and so from that angle, I would say we are in a nice spot.

You are primarily into IT services is there any plan to perhaps expand into other verticals or what it be sort of limited to verticals that are similar to the ones that you are currently present in?
We should be clear that we are an IT services company, we are not in any other business and neither do we plan to get into those businesses. The way we define and the whole industry defines the verticals is different. For example, our largest and fastest growing vertical is edutech. You can clearly see how that is going to benefit from this environment because everything is becoming virtual.

The other vertical in which we have got a very strong presence is the rest of the high tech world. Again because it is a core competence at Happiest Minds, two of them account for 76% of our business which have been only marginally or not impacted by the Covid crisis. The other 24% has been affected but fortunately we have got a very marginal presence in travel and hospitality which is the worst impacted vertical and therefore we have to continue to build on the strengths that we have. We believe we have got a pretty broad coverage in terms of verticals. It is not that we are planning to get into any new areas but what distinguishes us is the fact that we are always investing in new technologies and then we build solutions and solutions accelerators to get into those markets.

I will give you one example here. When we began Happiest Minds, we were in what was called a SMACK pack which included analytics and cloud after that we have added over the years the internet of things, machine learning, virtual and augmented reality and so on.

Your stake has come down post the listing, are there any plans to reduce the stake further from the current levels? After Mindtree and Happiest Minds, do you have interest in other ventures or plans ahead?
First thing, in terms of my stake after the dilution will be 55% but a very large proportion of our shares are also held by our team members. So if you have got a question at the back of your mind as to whether there could be a hostile takeover because you have brought in MindTree also, all I have to tell you is that there is no such threat and there will never be for that matter. We will keep ourselves well positioned as far as that is concerned.

Going forward, I do not want to speculate on whether my shares will go up or go down, if we raise more equity obviously, but there are no immediate plans to do so. Whatever happens, we will keep one thing in mind that there will never be a threat in the sense of ownership which could create a hostile acquisition situation.