Hexaware Technologies is set to launch its $1 billion initial public offering (IPO) on Wednesday, February 12. The IT solutions provider shall be selling its shares in the range of Rs 675-708 apiece and the issue can be applied for a minimum of 21 equity shares and its multiples thereafter, until Friday, February 14, when the issue closes for bidding.
Incorporated in 1992, Navi Mumbai-based Hexaware Technologies is engaged in the business of global digital and technology services with artificial intelligence. The company uses technology to offer innovative solutions, integrating AI to help customers adapt, innovate, and improve in the AI-driven world.
The Rs 8,750 crore-IPO of Hexaware Technologies is entirely an offer-for-sale (OFS) of up to 12,35,87,570 equity shares by its promoter CA Magnum Holdings. It will not receive any proceeds from the issue. The anchor book for the issue shall open Tuesday, February 11.
Before the issue kicks-off for subscription later this week, the IPO of Hexaware Technologies is commanding a mild grey market premium (GMP) of Rs 8-10 per share, suggesting a flat listing gains for the investors over the upper end of the price band. The stock stood at Rs 19-20 at its peak when price band for the issue was announced.
Hexaware Technologies is valued at CY23/CY24E (annualized) P/E of 43.1 times/37.6 times based on the upper price band on the post-issue capital, which is relatively cheaper than its peers. It has a diversified revenue mix in terms of industries, said SBI Securities. It leverages AI to build solutions for its clients driving improvement in productivity and gains in utilization," it said.
"Hexaware’s dollar revenue, rupee revenue and PAT have grown at a CAGR of 14 per cent, 20 per cent and 15 per cent over CY21-23 with stable EBIT margin, respectively. It has a healthy cash balance of Rs 1,346 crore as of September 2024. We recommend subscribing to the issue at the cut-off price with a long-term investment horizon," it added.
Other than February 12-14, when the issue shall be open for bidding, other important dates for the bidders shall be February 17 (Monday) and February 19 (Wednesday). The allotment of shares all be finalized on February 17, while the stock will be listed at the bourses on February 19. Shares will be credited to the investors account by February 18, Tuesday.
Hexaware Technologies has major offshore delivery centers in India (Chennai, Pune, Bengaluru, Noida, etc.) and Sri Lanka. It plans expansion into Tier 2 cities and aims to open new centers in Ahmedabad. The company has a global delivery presence with 39 centers and 16 offices across the Americas, Europe, and APAC as of September 30, 2024.
Hexaware Technologies has reserved shares worth Rs 90 crore for its eligible employees, who will get a discount of Rs 67 per share in the IPO. It has reserved 50 per cent of the shares for qualified institutional bidders (QIBs), while non institutional investors (NIIs) will have 15 per cent for the allocations. Retail investors shall get 35 per cent of the reservation in the issue.
For the six months ended on September 30, 2024, Hexaware Technologies clocked net profit of Rs 853.3 crore with a revenue of Rs 8,594.2 crore. The company reported a net profit of Rs 997.6 crore with a total revenue of Rs 10,389.1 crore for the Financial year ended on March 31, 2024. The company shall command a market capitalization close to Rs 43,025 crore.
Kotak Mahindra Capital, Citigroup Global Markets India, JP Morgan India, HSBC Securities & Capital Markets and IIFL Securities are the book running lead managers of the Hexaware Technologies IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both NSE and NSE.