Hexaware Technologies, the software solutions firm with a strong foothold in the IT services industry, is gearing up for its much-anticipated initial public offering (IPO) worth ₹8,750 crore. This IPO is especially significant as it marks the company’s return to the stock market after its delisting nearly five years ago, and it promises to be the largest IPO by any Indian IT services company, eclipsing the record previously held by Tata Consultancy Services (TCS).
The IPO has set its price band between ₹674 and ₹708 per equity share. Bidding is set to commence on February 12 and will close on February 14, with the anchor book opening just one day earlier on February 11. Investors can acquire shares in lots, with the minimum bid consisting of 21 shares, translating to at least ₹14,868 for the base lot.
Promoter CA Magnum Holdings, associated with U.S. private equity firm Carlyle Group Inc., will entirely offload its stake through this offer-for-sale (OFS). Post-IPO, Carlyle’s ownership will drop from 95.03% to approximately 74.1%. Although the company’s promoters will benefit from this divestment, the firm itself will not gain any proceeds from this IPO.
Notably, Hexaware had last delisted from the stock market back in September 2020 at ₹475 per share. The current offering not only scales back the previously proposed issue size from ₹9,950 crore but also reveals the firm’s strategic shift, especially as it plans to capitalize on the demand for digital technologies and artificial intelligence services.
The price band is reflective of Hexaware’s financial performance—serious growth indicators are evident, such as the company reporting ₹997.6 crore net profit and ₹10,380.3 crore revenue for the fiscal year 2023-24—an increase of 12.8% compared to the previous fiscal year. The Americas remain Hexaware's largest revenue contributor, representing 73.4% of its income, with the healthcare and BFSI sectors driving nearly half of its revenue.
During the first nine months of the fiscal year 2024, Hexaware’s revenue surged to ₹8,820 crore with profits of ₹853.3 crore. This performance highlights the company’s resilience amid varying global economic conditions and strengthens its position against competitors such as Persistent Systems and Coforge, who have also reported significant growth.
The allocation for the public offering is structured to favor various investor classes: 50% reserved for qualified institutional buyers (QIBs), 35% for retail investors, and 15% for non-institutional investors (NIIs). Eligible employees will also receive shares worth ₹900 million at a discount of ₹67 per share during the offer.
Hexaware’s return is waiting to be met with public interest, especially as it emerges from a period of private ownership and strategic shifts all aimed at digital transformation. The upcoming listing scheduled for February 19 has all eyes on the market, with many hoping it could set the trend for similar tech IPOs.
While the grey market premium (GMP) is reportedly around ₹30 over the issue price, indicating optimistic sentiment, investors remain cautioned yet intrigued about Hexaware’s market debut following its complex history of delisting and reacquisitions since 2020.
With its global operations and emphasis on artificial intelligence technologies, Hexaware seeks not only to reclaim its space on the bourses but to tap actively growing sectors amid fierce competition. The company plans future expansions, especially targetting Tier 2 cities for establishing new delivery centers, showcasing its forward-thinking strategy.
Analysts will be closely monitoring Hexaware’s stock performance post-IPO, as it embarks on this new chapter, concluding five years of absence from the public eye. The future, it seems, holds substantial promise for Hexaware as it reintegrates itself onto Dalal Street.