Hexaware Technologies made a quiet debut on the bourses with India’s largest IT public offering today. The stock made a flat debut on Wednesday, 19th February, listing at Rs 731 on the BSE, a premium of 3.25% to its issue price of Rs 708. On the National Stock Exchange (NSE), it listed at Rs 745.50, up 5.29%.
This marks the return of India’s 8th largest IT services firm (by revenues) to the stock market after delisting in 2020. Valued at around Rs 8,750 crore, Hexaware Technologies’ IPO is the largest-ever public issue by an Indian IT services company, surpassing the previous record set by Tata Consultancy Services (TCS), which went public in 2024.
After three days of bidding, the Hexaware Technologies IPO closed with subdued demand, receiving 2.79 times the bids but was fully subscribed in only one category. The IPO attracted bids for 24.28 crore shares, while 8.7 crore shares were available. The retail investor portion saw an 11% subscription, while the non-institutional investors (NII) and employee categories were subscribed at 21% and 33%, respectively. On the other hand, the qualified institutional buyers (QIB) quota was oversubscribed, with bids 9.55 times the available shares.
The Rs 8,750 crore IPO was entirely an offer for sale of 12.36 crore shares by promoter CA Magnum Holdings, a subsidiary of US private equity firm Carlyle Group Inc. Post-IPO, Carlyle’s shareholding declined to 74.1% from 95.03%.
Hexaware Technologies IPO – Should You Buy, Sell, or Hold?
Despite the subdued response from investors, the listing performance exceeded grey market expectations. Ahead of the IPO, shares of Hexaware Technologies were trading flat in the grey market. The grey market premium (GMP) had turned zero in the unlisted market, indicating a listing around the issue price. The Hexaware Technologies IPO GMP touched a peak of Rs 11 on 8th February.
At the time of writing, the stock was trading at Rs 775, up 67 points or 9.46% from its issue price of Rs 708.
Abhishek Pandya, research analyst at Stoxbox, says the issue was priced at a price-to-earnings (P/E) ratio of 43.1x based on CY23 earnings, which is relatively lower compared to its peers.
“We had previously assigned it a ‘Subscribe’ rating. Therefore, we recommend that investors who have received shares consider holding onto their positions for a medium to long-term horizon,” Pandya said.
Brokerage firm JM Financial has also initiated coverage on the Hexaware Technologies stock with a “Buy” rating and a target price of Rs 820.
“We therefore value the stock at 30x 24M forward EPS (10% premium to the average of the mid-cap IT basket’s FY26 PER) to arrive at our target price of INR 820, implying 16% upside from the upper end of the IPO price band (INR 674-708). We initiate coverage with a ‘Buy’ rating. Headwinds in Top-5, especially Fannie Mae (a top-3 account), could be a key risk to our investment thesis,” the brokerage wrote in its report.
According to JM Financial, HEXW is the 8th largest IT services company in India, with revenues of USD 1.4 billion. Its revenue is well spread across different services, industries, and types of clients. The company offers a range of services including front-end, mid-end services such as data, AI, and security, as well as back-end services for industries like finance, HR, and operations. This diverse range allows HEXW to participate in both growth-focused and efficiency-driven projects.
In terms of industries, four out of six sectors have reached over USD 200 million in annual revenue. Additionally, HEXW has the lowest client concentration compared to its competitors, which has helped the company maintain steady growth despite slower growth from its top five clients.
