Hexaware Technologies IPO: Shares Listed at 5% on High
IPO Overview
Hexaware Technologies, a leading information technology services provider, launched its ₹8,750 crore IPO from February 12 to 14, with a price band of ₹674–708 per share. The offering was entirely an Offer for Sale (OFS) by its promoter, CA Magnum Holdings, affiliated with The Carlyle Group. The IPO was oversubscribed 2.66 times. The shareholders pattern is as follows: the Qualified Institutional Buyers (QIBs) subscribed 9.09x, while Non-Institutional Investors (NIIs) and Retail Individual Investors (RIIs) subscribed at 20% and 11%, respectively. The company raised ₹2,598 crore from institutional investors, with a valuation exceeding ₹43,000 crore at the upper price band. The book-building procedure of the IPO was managed by Kotak Mahindra Capital Company, Citigroup Global Markets India, JP Morgan India, HSBC Securities & Capital Markets Pvt Ltd, and IIFL Securities Ltd.
Market Position & Industry Analysis
The Information Technology (IT) & Business Process Management (BPM) sector plays a crucial role in India’s economy, contributing 7% to the GDP as of FY24. India has one of the largest internet consumer and, at the same time, has the lowest internet costs globally. With this, India is next for the next phase of IT growth. The Digital India Programme has strengthened digital infrastructure and access, driving rapid digital adoption through government initiatives, private sector innovation, and emerging digital applications. These advancements are creating economic value and enhancing citizen empowerment. India’s global standing in innovation has also improved, ranking 40th in the 2022 Global Innovation Index. Hexaware Technologies provides IT services in business process services, digital IT operations, cloud, data & AI, application services, and cybersecurity. The company operates across 50 offices in 19 countries, with a diverse workforce of 90 nationalities and approximately 33% women representation. The company competes with major IT service providers such as Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Technologies. The IT services sector is witnessing rapid digital transformation and increasing demand for AI, cloud computing, and automation. Hexaware’s strategic focus on cloud and AI-driven solutions positions it well for future growth.
Financials & Valuation
Hexaware’s market capitalization stood at ₹44,422.48 crore post-listing and later rose to ₹46,285.06 crore as the stock gained 2.17% to ₹761.65 per share. The stock opened at ₹745.50 on the NSE, reflecting a 5.3% premium over the issue price, while on the BSE, it listed at ₹731, a 3.25% premium. By the end of the first trading day, shares settled at ₹755.75 on NSE (6.74% above the IPO price) and ₹763.85 on BSE (7.89% above the IPO price). During intraday trading, the stock peaked at ₹788, reflecting an 11.3% gain. Hexaware’s valuation, compared to industry peers, indicates strong growth potential and a focus on scalable digital transformation services.
Investor Sentiment & Analyst Insights
Despite a subdued initial listing, Hexaware Technologies’ stock gained traction due to strong investor interest. The oversubscription of the IPO, particularly by institutional investors, indicates confidence in the company’s future growth. The IT services sector’s expansion, coupled with Hexaware’s cloud and AI-driven strategy, presents growth opportunities. However, potential risks include global economic slowdowns, intense competition from larger IT players, and evolving regulatory challenges. The grey market premium (GMP) trends suggested moderate demand pre-listing, which translated into a stable yet promising listing performance. Overall, the IPO’s strong institutional backing and Hexaware’s strategic focus make it an attractive investment opportunity for long-term investors.
Investors who did not receive the subscription should wait for the company’s quarterly results to assess its performance and decide whether to own the shares.