Hexaware Technologies Limited has marked its entry to the stock market with its initial public offering (IPO), comprising only of an offer for sale (OFS), aiming to raise up to Rs. 8,750 crore. The IPO price band is set between Rs. 674 and Rs. 708, and will be open for bidding from February 12, 2025, to February 14, 2025, with shares expected to list on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) post-allotment.
On February 13, 2025, the shares of Hexaware were already trading at Rs. 711 in the grey market, indicating just over 0.42% premium from the upper price band. This suggests positive market sentiment surrounding the offering, likely driven by the firm’s impressive financial performance and market positioning.
Founded in 1992, Hexaware Technologies is known as a prominent player in global digital and technology services, focusing heavily on integrating artificial intelligence to bolster business growth. With 39 delivery centers located across India and Sri Lanka, plans for expansion include increasing operations to Tier 2 cities like Ahmedabad, plus maintaining 16 additional offices worldwide. Its services span various industries, including banking, healthcare, and manufacturing, and include notable AI-powered platforms like RapidX™, Tensai®, and Amaze®.
Hexaware takes great pride not only in its growth but also in its size, employing over 32,500 people and providing services ranging from cloud solutions to IT security and data analytics aimed at enhancing business efficiency and promoting digital transformation globally.
The company is primarily promoted by CA Magnum Holdings, which holds 95.03% of the pre-IPO shares, thereby exercising significant influence over its operations and strategic direction. The entire offering will facilitate existing shareholders to liquidate their stakes rather than replenishing the company’s capital reserves.
The lead managers for this major IPO include notable institutions such as Kotak Mahindra Capital Company, Citigroup Global Markets, J.P. Morgan, HSBC Securities, and IIFL Capital Services, with KFin Technologies Limited appointed as the registrar to manage share allotments and refunds.
Hexaware Technologies' financial growth over recent years reflects remarkable success, exemplified by revenue jumping from Rs. 7,763.1 crore for FY22 to Rs. 10,389.1 crore for FY23, equaling a 33.83% increase. The company has reported continued growth with Rs. 8,871.3 crore accrued by September of FY24, alongside profit rising from Rs. 804.8 crore (FY22) to Rs. 997.6 crore (FY23), showing consistent growth, with respective CAGRs of 19.75% and 15.42% over two years. This financial momentum has not gone unnoticed, contributing to strong investor interest during the IPO period.
When compared to its peers, Hexaware Technologies holds its own among established names like Persistent Systems, Coforge, LTIMindtree, and Mphasis, indicating its competitive positioning within the growing domain of IT services and digital transformation. While Hexaware benefits from strong client relationships and market presence, it does grapple with challenges, including heavy reliance on North American clients, implying susceptibility to regional market dynamics.
Despite its strengths, Hexaware must navigate the competitive nature of the IT industry, characterized by rapid technological shifts and economic vulnerabilities, which could impact its sustainability. The current market environment, marked by uncertainty due to economic downturns and growing cybersecurity concerns, presents both risks and opportunities for future growth.
Overall, the Hexaware Technologies IPO not only highlights the company’s impressive achievements but also positions it strategically for investors who are increasingly cautious yet optimistic about technology-driven firms. Analyst comparisons with peers and market outlook paint Hexaware as a contender for those seeking exposure to the tech sector amid the broader IPO environment.
Given the dynamics of the market and Hexaware's established track record, the interest surrounding this IPO signifies important trends within the financial sector, inviting investors to weigh their options carefully before engaging. The principle of caution remains key as investors assess the potential for financial rewards against prevailing market risks.