Hexaware Technologies IPO Sees Weak Demand Amid Market Volatility; Ken Enterprises Lists at a Discount

Hexaware Technologies’ ₹8,750 crore IPO has seen weak demand, with low subscription rates and a flat grey-market premium. Investor sentiment remains cautious due to high pricing, market volatility, and slowing growth. Meanwhile, Ken Enterprises debuted at a discount, reflecting broader negative sentiment in the IPO market.

CONTENTS:

• Hexaware Technologies IPO Sees Tepid Demand on Second Day; Subscription Remains Low
• Hexaware Technologies’ IPO: A Big Win for Carlyle, a Letdown for Investors
• Hexaware Technologies IPO Sees Weak Demand; Ken Enterprises Debuts at a Discount

Hexaware Technologies IPO Sees Weak Demand Amid Market Volatility; Ken Enterprises Lists at a Discount

Hexaware Technologies IPO Sees Tepid Demand on Second Day; Subscription Remains Low

Hexaware Technologies’ ₹8,750 crore IPO has seen subdued demand on its second day of subscription, with an overall booking of just 4% so far. The public issue, backed by private equity giant Carlyle Group, is set to close on February 14.

As of Thursday, the Qualified Institutional Buyers (QIB) segment had been subscribed 4%, while the Retail Individual Investors (RII) portion saw a 5% subscription. Non-institutional investors subscribed to only 2% of their allocated quota.

In the grey market, Hexaware Tech’s shares are currently trading at a flat premium, according to Investorgain.

Prior to the IPO launch, the company secured ₹2,598 crore from anchor investors. The issue is priced between ₹674 and ₹708 per share, valuing Hexaware Technologies at over ₹43,000 crore at the upper range.

This IPO marks the largest offering in India’s IT services sector since Tata Consultancy Services (TCS) raised ₹4,700 crore more than 20 years ago. Hexaware Technologies specializes in digital and technology services on a global scale.

The share allotment is expected to be finalized on February 17, with the listing scheduled for February 19.

Hexaware Technologies’ IPO: A Big Win for Carlyle, a Letdown for Investors

Hexaware Technologies’ return to the stock market has proven to be a major win for private equity firm Carlyle Group, but for most other investors, it’s shaping up to be a disappointment.

Despite being the largest IT services IPO in India since Tata Consultancy Services’ ₹4,700 crore listing nearly two decades ago, the ₹8,750 crore ($1 billion) IPO has failed to generate enthusiasm. A stockbroker from Rajkot—a key city for retail investor participation—warned clients to stay away, calling the IPO “too expensive.”

Investor sentiment has taken a hit, as the grey-market premium (GMP)—which reflects an IPO’s unofficial pre-listing demand—has dropped to nearly zero. This suggests that Hexaware’s shares may see little to no listing gains and could even follow the fate of Hyundai Motor India’s 2024 IPO, which struggled to gain traction and still trades below its issue price.

Even long-term investors are cautious. Three equity analysts and market participants told The Ken they were “not excited” about Hexaware’s listing, despite agreeing that it is a well-run business. As one IT sector analyst put it, “Good businesses aren’t always good buys.”

The skepticism stems from several factors: market volatility, slowing business growth, and uncertainties around policy and technology. The IPO’s pricing does not appear to account for these risks.

However, for Carlyle, which led Hexaware’s delisting in 2020 and is now bringing it back to the public markets, this IPO marks a highly profitable exit.

Hexaware Technologies IPO Sees Weak Demand; Ken Enterprises Debuts at a Discount

The primary market saw mixed activity on February 12, with Hexaware Technologies’ mainboard IPO opening to a lukewarm response, while Ken Enterprises’ shares listed at a discount. Meanwhile, Ajax Engineering’s IPO closed with solid demand, and two new SME stocks debuted with weak performances amid prevailing negative sentiment in secondary markets.

Hexaware Technologies IPO – Day 1 Update

The ₹8,750 crore IPO of IT services firm Hexaware Technologies opened to a sluggish start, with an overall subscription of just 3% by the end of the first day. The retail portion was subscribed 4%, while Non-Institutional Investors (NIIs) booked only 1% of their allotted quota. Qualified Institutional Buyers (QIBs) subscribed to 4% of their reserved portion.

Hexaware’s IPO is a fully book-built issue, consisting entirely of an offer-for-sale (OFS) of 12.36 crore shares. The price band has been set at ₹674 to ₹708 per share, with a minimum application lot size of 21 shares. Investors can place bids until February 14, with allotment expected to be finalized on February 17. The company’s shares are slated to list on the BSE and NSE on February 19.

Other IPO Market Highlights

• Ken Enterprises Listing: SME firm Ken Enterprises made its stock market debut on the Emerge platform at ₹85 per share, marking a 9.57% discount from its issue price of ₹94. The IPO was subscribed 4.36 times.
• Amwill Healthcare Listing: Another SME firm, Amwill Healthcare, also had a disappointing start, listing at ₹88.85—down nearly 20% from its issue price of ₹111 per share. The company’s ₹59.98 crore IPO had been oversubscribed nearly six times.

Ongoing and Recent IPO Performance

• Maxvolt Energy IPO: The SME IPO of Maxvolt Energy saw a 56% subscription on its opening day, with retail and NII segments subscribing 36% and 41%, respectively. The QIB portion was fully booked.
• Voler Car IPO: The car rental firm’s IPO was 90% subscribed on Day 1, with full booking in the retail category and 97% in the NII segment. The QIBs did not place any bids.
• PS Raj Steels IPO: The ₹28.28 crore IPO was subscribed nearly twice over on the first day, with the retail portion booked 1.95 times and NIIs subscribing nearly 4 times.
• Ajax Engineering IPO: The ₹1,269.35 crore IPO closed with a strong subscription of 6.44 times. The QIB segment led the demand, subscribing 14.41 times, while the retail portion saw 1.92 times subscription.
• Chandan Healthcare IPO: The healthcare services provider closed its ₹107.36 crore IPO with an overall subscription of 7.11 times.

Upcoming IPO Allotments & Listings

• Eleganz Interiors IPO: The ₹78.07 crore SME IPO, which was subscribed 31 times, is expected to finalize its allotment by the end of February 12.
• Ajax Engineering & Chandan Healthcare Listings: These companies are set to list on February 17.