The initial public offering (IPO) of Hexaware Technologies will open for subscription today, Wednesday, February 12. The firm is a worldwide provider of digital and technological services, with artificial intelligence (AI) as a fundamental element.
The public issue is a complete offer for sale (OFS) of 123.6 million equity shares.
The IT services provider has fixed the price band of its Rs 8,750 crore IPO between Rs 674 to Rs 708 per share. Retail investors can bid for a minimum of one lot of Hexaware’s shares in the issue, which will include 21 shares and in multiples thereafter. One lot will entail a minimum investment of Rs 14,868 per lot and a retail investor can bid for a maximum of 13 lots or 273 shares, with an investment amount of Rs 1,93,284.
Hexaware Technologies IPO will be the largest issue by an Indian IT services company, surpassing TCS’s record in 2004, when it raised Rs 4,713 crore.
In November 2020, Hexaware’s Technologies shares were delisted from the Indian bourses after the company’s promoters agreed to a delisting price of Rs 475 per share. This marked the first successful delisting on Indian stock exchanges since December 2018.
In October 2021, the Carlyle Group, a US-based private equity firm, acquired a majority stake in Hexware from Baring Private Equity Asia for around $3 billion.
Ahead of its IPO, the company has raised Rs 2,598 crore from anchor investors. The company announced that it allocated 3.66 crore shares at Rs 708 each, the upper price band.
Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, J.P. Morgan India Private Limited, HSBC Securities & Capital Markets Pvt Ltd and IIFL Securities Ltd are the book-running lead managers of the Hexaware Technologies IPO. Kfin Technologies Limited is the registrar for the issue.
Hexaware Technologies IPO Key Dates
The three-day subscription window to bid for the Hexaware Technologies IPO will close on Friday, February 14, 2025. The allotment of shares is likely to be finalised on Monday, February 17, 2025. Shares of Hexaware Technologies are expected to be listed on the BSE and NSE on Wednesday, February 19, 2025.
Hexware Technologies IPO Objective
The company will not receive any proceeds from the offer. The selling shareholders will receive their respective share of proceeds from the sale after deducting their portion of the offer-related expenses and applicable taxes like fees and commissions and miscellaneous charges.
Hexaware Technologies IPO GMP
Hexaware Technologies IPO was commanding a grey market premium (GMP) of Rs 3.5, as of February 12, 10:29 AM. With the price band set at Rs 708, the estimated listing price for the IPO is Rs 711.5. This suggests an expected gain of 0.49% per share on the listing day.
Hexaware Technologies IPO - Should you subscribe?
Anand Rathi – Subscribe
Analysts at Anand Rathi Research believe the company is fairly priced and recommended a “Subscribe” rating to the IPO.
“At the upper price band company is valuing at P/E of 43.1x with a market cap of Rs 430,247 million post issue of equity shares and return on net worth of 22.8%,” analysts wrote in a research note.
The company’s business has evolved over the last decade, with a growing set of offerings, larger and diversified customer base, wider global delivery footprint and higher focus on innovation and technology, the analysts said.
“Its expertise is further complemented by a mix of strategic and industry-focused partners, such as ServiceNow, offers AI-powered solutions for various business functions such as human resources, IT, customer service, security and finance, and Backbase, a banking financial technology company in the Netherlands,” analysts said.
“At the upper price band company is valuing at P/E of 43.1x with a market cap of Rs 430,247 million post issue of equity shares and return on net worth of 22.8%,” analysts wrote in a research note.
Geojit Financial – Subscribe
Geojit Financial Services recommended subscribing to this issue for long-term investment saying that with the consistent financial performance featuring better margins, the company is well-positioned for future success.
“At the upper price band of Rs 708, Hexaware is available at a P/E of 43.1x(CY23), which is fairly valued compared to its listed peers. The government support for outsourced services and India's well-established IT infrastructure, bolstered by strong telecommunications and innovative facilities, improves the company's delivery capabilities,” analysts wrote in a research note.
Bajaj Broking - Subscribe for long-term
Bajaj Broking also recommended subscribing to the issue for long-term investment. “If we attribute CY24 annualized earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 37.82. Based on FY24 earnings, the P/E stands at 43.12. Thus the issue appears relatively fully priced,” analysts said.
However, according to the management, it is having dominance in the first three mega players in the segment and enjoys most preferred partner. It has outperformed most of its peers and confident of maintaining the trends going forward, the research note added.
About the company
Incorporated in 1992, Hexaware Technologies Limited is engaged in the business of global digital and technology services with artificial intelligence. The company uses technology to offer innovative solutions, integrating AI to help customers adapt, innovate and improve in the AI-driven world.
The company has major offshore delivery centers in Sri Lanka and Indian cities like Chennai, Pune, Bengaluru and Noida. As of September 30, 2024, the company has a global delivery presence with 39 centres and 16 offices across the Americas, Europe and APAC.
Over the past three years, the company has reported strong financial performance. In 2021, it earned a total income of Rs. 7,244.60 crore and a net profit of Rs. 748.80 crore. In 2022, the income increased to Rs. 9,378.80 crore, with a net profit of Rs. 884.20 crore. In 2023, the company’s income rose to Rs. 10,389.10 crore, while net profit grew to Rs. 997.60 crore. For the first nine months of 2024, ending September 30, the company earned a net profit of Rs. 853.30 crore on a total income of Rs. 8,871.30 crore.
