Hexaware Technologies IPO: India’s Largest IT Services Listing Debuts with a 5.3% Premium on NSE

Hexaware Technologies debuted on NSE and BSE with a 5.3% and 3.25% premium, respectively, after its ₹8,750-crore IPO. The offering, India’s largest IT services IPO, was fully an Offer for Sale (OFS) by Carlyle, reducing its stake from 95% to 74.1%. Analysts recommend a long-term hold due to the company’s strong financials, AI-driven growth, and competitive valuation.

CONTENTS:

• Hexaware Technologies Share Price Live Updates: Stock Gains 5.3% Post Listing at ₹745.5 on NSE
• Hexaware Technologies: India’s Largest IT Services IPO Debuts with a 5% Premium

Hexaware Technologies IPO: India’s Largest IT Services Listing Debuts with a 5.3% Premium on NSE

Hexaware Technologies shares debuted on the NSE and BSE on February 19 with a modest premium following strong IPO demand. The stock was listed at ₹745.5 on the NSE, reflecting a 5.3% gain over its issue price, while on the BSE, it opened at ₹731, marking a 3.25% premium. Despite a robust IPO subscription of 2.66 times, the listing performance remained moderate.

The ₹8,750-crore IPO, open for bidding from February 12-14, had a price band of ₹674-708 per share and secured ₹2,598 crore from anchor investors. This was the largest public offering in India’s IT services sector since Tata Consultancy Services’ ₹4,700-crore IPO over two decades ago. At the upper price band, Hexaware’s valuation surpassed ₹43,000 crore, with a market capitalization of ₹44,422.48 crore post-listing.

Analysts suggest a long-term investment perspective due to the company’s attractive valuations and growth potential. The IPO was priced at a P/E ratio of 43.1x based on CY23 earnings, which is relatively lower than its industry peers. Investors who received allotments are advised to hold for medium- to long-term gains.

Hexaware Technologies Share Price Live Updates: Stock Gains 5.3% Post Listing at ₹745.5 on NSE

Hexaware Technologies shares debuted on the stock market today, listing on both the NSE and BSE. Despite a relatively subdued trend indicated by the grey market premium (GMP), the stock opened at ₹745.5 on the NSE, reflecting a 5.3% premium over its issue price of ₹708. On the BSE, it was listed at ₹731, a 3.25% gain.

The company’s IPO, open from February 12 to 14, secured a total subscription of 2.66 times, primarily driven by institutional investors. The Qualified Institutional Buyers (QIB) segment saw a strong 9.09x subscription, while Non-Institutional Investors (NII) subscribed at 20%, and Retail Individual Investors (RII) at just 11%. Hexaware also raised ₹2,598 crore from institutional investors, with a price band set between ₹674-708 per share. At the highest end, the company’s valuation exceeds ₹43,000 crore.

The IPO consisted entirely of an Offer for Sale (OFS) worth ₹8,750 crore by promoter CA Magnum Holdings, affiliated with The Carlyle Group. Notably, this is the largest IPO in India’s IT services sector since Tata Consultancy Services’ ₹4,700-crore offering over two decades ago.

Stock Performance & Analyst Insights

At 11:14 AM IST, Hexaware’s stock traded at ₹753.85 on NSE (+1.12%) and ₹754.05 on BSE (+3.15%). Brokerage firm JM Financial initiated coverage with a BUY rating and a target price of ₹820, citing Hexaware’s growth potential, relative scale, and margin expansion opportunities.

Strategic Growth Plans

• Enhancing its offerings and technology platforms
• Strengthening relationships with existing clients
• Targeting large customers for high-value opportunities
• Expanding into new markets and industries

Hexaware has also been actively incorporating AI and GenAI into its operations, which analysts believe will improve efficiency and competitive positioning.

Industry Comparison & Outlook

According to the company’s Red Herring Prospectus (RHP), its key competitors include Persistent Systems (P/E 84x), Coforge Ltd (P/E 64x), LTIMindtree Ltd (P/E 38x), and Mphasis Ltd (P/E 34x). Hexaware, priced at a P/E ratio of 43.1x (CY23 earnings), appears relatively undervalued compared to some peers.

Investor Recommendations

Analysts suggest that investors who received allotments should consider holding shares for the medium to long term, given the company’s stable business model and potential for margin improvement.

Hexaware Technologies: India’s Largest IT Services IPO Debuts with a 5% Premium

Hexaware Technologies, an IT services company, made a strong entry on the stock market, listing at a premium on both the NSE and BSE. The stock opened at ₹731 on the BSE, compared to the IPO price range of ₹674-₹708, while on the NSE, it debuted at ₹745.5, reflecting a 5.3% premium.

Record-Breaking IPO in the IT Sector

Hexaware Technologies’ ₹8,750-crore initial public offering (IPO) is the largest by an Indian IT services company, surpassing the ₹4,713-crore IPO of Tata Consultancy Services (TCS) in 2004. The IPO was open for subscription from February 12 to February 14.

Unlike a fresh issue, Hexaware’s IPO was an Offer for Sale (OFS) by private equity firm Carlyle, meaning no new capital was raised for the company. Following the IPO, Carlyle’s stake in Hexaware has reduced from 95% to 74.1%.

Institutional Interest and Valuation

Ahead of the listing, Hexaware secured ₹2,598 crore from 96 institutional investors, including major global firms such as the Government of Singapore, the Monetary Authority of Singapore, CLSA, JP Morgan, and Goldman Sachs. The IPO’s price band was set at ₹674-₹708 per share, valuing the company at ₹43,247 crore at the upper limit.

Company Overview

Founded in 1992, Mumbai-based Hexaware Technologies is a global IT and digital services provider, integrating artificial intelligence (AI) and automation into its solutions. The company was previously delisted in 2020 at ₹475 per share when its promoters took it private.

For the nine months ending September 2024, Hexaware reported revenues of ₹8,820 crore and a net profit of ₹853.3 crore, showcasing its financial strength and growth potential.