IGI Logo

Happy Square Outsourcing Services

• Happy Square Outsourcing Services is coming out with an initial public offering (IPO) of 31,90,400 equity shares in a price band Rs 72-76 per equity share.
• The issue will open on July 3, 2025 and will close on July 7, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 7.20 times of its face value on the lower side and 7.60 times on the higher side.
• Book running lead manager to the issue is Corpwis Advisors.
• Compliance Officer for the issue is Angha Ambalkar.

Profile of the company

Happy Square is a technology-based consulting firm, involved in Tech based human resource outsourcing business which focuses on end-to-end solution. Promoters of the company, Shraddha Rajpal and Nalini Rajpal have a combined experience of 10 plus years in the staffing industry. Driven by the passion for building an integrated staffing company, backed by their experience, its Promoters are the pillars of the company's growth and have built a strong value system for the company. With their enriching experience and progressive thinking, it aims to continue to grow in the human resource outsourcing business.

The company offers a wide array of services such as Recruitment, Payroll, Onboarding and flexible staffing. Its comprehensive network, structured processes, professionalism and strong work ethics ensure that it remain at the top on the domestic scale. It satisfies firms’ staffing, and recruitment needs in India through this specialised rich knowledge.

Its substantial talent pool and deep understanding of the hiring industry has helped it to achieve significant strides in the HR market. It is also an ISO 9001:2015 certified company. A proper staffing process allows it to identify the current and future requirements of the clients. Further, it helps it to create and execute a plan as per the derived requirements to hire the most suitable candidates.

Proceed is being used for:

• Funding of working capital requirements of the company
• General corporate purposes

Industry Overview

India has witnessed significant employment growth over the years. With the employment increased by nearly 36%, adding around 170 million jobs during 2016-17 and 2022-23, India's economic trajectory demonstrates sustained job creation across key sectors. With a robust democracy, dynamic economy, and a culture that celebrates unity in diversity, India’s journey toward becoming a global powerhouse continues to inspire the world. Recent data and economic analysis challenge the notion of 'jobless growth' in India, a concept that suggests GDP growth occurs without corresponding increases in employment.

The India Staffing and Recruiting market is valued at $18.5 Billion, based on a five-year historical analysis. This growth is driven by the increasing demand for flexible staffing solutions across various industries, including IT, manufacturing, and BFSI. The market's expansion is supported by the rise in digital recruitment technologies and a growing preference for temporary staffing due to evolving business needs and project-based requirements, making it a pivotal component of India’s workforce management ecosystem. Indian Staffing Federation (ISF) is the apex body of organized staffing companies representing over 1.66 million contract workforce employed through 121 member companies. ISF is formed to provide a platform for organized employment, work choice, compensation, social security and health benefits for the temporary workforce.

The rise of AI and automation can lead to fewer jobs, or a shift in the types of roles that need filling. This could reduce the demand for certain types of staffing services, especially in fields susceptible to automation. The staffing industry is highly competitive. New entrants, online job platforms, or global staffing agencies can reduce market share and put pressure on pricing. Nevertheless, the yearly net payroll additions to the EPFO have more than doubled from 61.1 lakh in FY19 to 131.5 lakh in FY24, driven by new job creation and greater formalization of employment. India’s gig economy is expanding rapidly, with the workforce in this sector expected to grow to 2.35 crore by 2029-30. 

Pros and strengths

Scalable business model: The company’s business model is technology driven and comprises of optimum utilization of its ability to put together a successful hiring and manpower recruitment team and achieving consequent economies of scale. The company approach has proven profitable and scalable over the past few financial years. It can expand by acquiring new client, entering new sectors as well as growing its existing client businesses. Business growth is mostly driven by expanding into new markets and maintaining continuous timely. This business model has proved successful and scalable for it since its incorporation. It can scale upward as per the requirement generated by the company.

Catering to diversified industrial verticals: The company thrives on a diverse revenue stream sourced from multiple regions industries across India. As a provider of manpower and human resource outsourcing services company, its extensive presence across India not only enables it to broaden its client portfolio but also ensures that it remains at the forefront of client requirements.

Customer Satisfaction and long-standing relationships with its customers: The company has worked with large number of marque clients which includes Cars24 Services Private Limited and Octopolis Technologies Private Limited to name a few. It has long-standing ties with its customers. This is attributable to the importance that its services hold. It builds long-term relationship with its customers to enable in-depth involvement with various departments and divisions of their organizations and enable it to understand their staffing requirements. Its service offerings enable it to cross-sell to current clients as well as attract new ones. It also conducts regular senior management reviews with its important clients to get feedback and discuss future potential.

Risks and concerns

Maximum revenue comes from limited customers: The company has garnered 65.56%, 61.43% and 70.44% of its total revenue from top 10 customers in FY25, FY24 and FY23 respectively. Significant dependence on certain clients, particularly in its relatively newer service offerings, may increase the potential volatility of its results of operations, if it does not achieve its expected margins or suffer losses on such contracts. The loss of, or a significant decrease in revenues from its key customers or key geographies due to any economic or other factors beyond its control may adversely affect its revenues, results of operation and profitability. 

Geographical constrain: The company operates in limited geographies for a significant portion of its revenue. The company’s operations are based out of limited region like Delhi, Uttar Pradesh, Kerala, Gujarat, Telangana, Haryana, Punjab, Maharashtra, Rajasthan, West Bengal, Assam, Madhya Pradesh, Chhattisgarh, Karnataka, Tamil Nadu and Andhra Pradesh. Exposure to projects in new geographies may not be as profitable as its current geographies. The company’s geographic concentration may have a have a material adverse effect on its business, results of operations and financial condition.

Management has limited experience in handling the business operations of the company: The company’s Managing Director, Poonam Rajpal and its Whole-time Director, Deepika Ondela hold an experience of over four years in corporate governance, and five years in human resource management, respectively, and therefore have a limited experience in handling the business operations of the company. Due to her limited experience, they may not be able to evaluate its business, future prospects and viability. Further, they may not have sufficient experience to address the risks relating to managing its operations. Additionally, they may not be able identify risks involved in its operations and therefore could fail to achieve timely fulfilment of business commitments and the quality requirements of its services.

Outlook

Happy Square Outsourcing Services specializes in HR outsourcing, focusing on recruitment, payroll, onboarding, and flexible staffing. The company is involved in a tech-based human resource outsourcing business focusing on end-to-end solutions. The company is catering to diversified industrial verticals. It has strong financial position and good track record of financial performance. On the concern side, the company’s revenue is dependent on limited customers and the loss of, or a significant decrease in revenues from, one or more of its key clients or primary markets may adversely affect its revenues, results of operations and financial performance. Moreover, the company operates in limited geographies for a significant portion of its revenue and also depends on limited number of customers for its revenue from operations. Projects in new geographies may not be as profitable as in existing geographies.

The company is coming out with a maiden IPO of 31,90,400 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 72-76 per equity share. The aggregate size of the offer is around Rs 22.97 crore to Rs 24.25 crore based on lower and upper price band respectively. On performance front, In FY25, the company’s revenue from operations has increased by 40.59% to Rs 9,741.46 lakh from Rs 6,928.87 lakh in FY2024 due to the addition of new customers in customer portfolio and additional services from the existing clientele. Moreover, net profit increased by 34.38% to Rs 590.34 lakh in FY25 from Rs 439.32 lakh in FY24 was primarily due to higher revenue growth, improved cost management, and better overall operational performance.

The company is focused on continuing to expand its relationships with existing customers by helping them in getting replacement as well as new manpower requirements and become more engaging, responsive and efficient. It has a demonstrated track record of expanding its work with customers after an initial engagement. As the company has done previously, it aims to sustain the annual revenue contribution of a customer in subsequent years after the year of customer acquisition. Expansion of its relationships with existing active customers will remain a key strategy going forward as it continues to leverage its staffing solution expertise and knowledge of emerging requirements in order to drive incremental growth for its business.