The Rs 8,750 crore IPO of Hexaware Technologies kicks-off for bidding today, that is on Wednesday, February 12. The IT solutions player is offering its shares in the range of Rs 675-708 apiece, for which investors can apply for a minimum of 21 equity shares and its multiples thereafter. The issue shall conclude for bidding on Friday, February 14.
Incorporated in 1992, Navi Mumbai-based Hexaware Technologies is engaged in the business of global digital and technology services with artificial intelligence. The 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.
Ahead of its IPO, Hexaware Technologies raised Rs 2,598 crore via anchor investors as it allocated 1,31,55,849 shares at Rs 708 apiece. Its anchor book included names like Fidelity, Abu Dhabi Investment Authority, Goldman Sachs, JP Morgan, T Rowe Price Fund, Amundi Funds, Franklin Templeton Investment, CLSA Global Markets, 3P India among others.
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.
The grey market premium (GMP) of Hexaware Technologies has seen a sharp correction ahead of the volatile market sentiments. Last heard, the company was commanding a premium of merely Rs 5 per share in the unofficial market, suggesting flat gains for the investors. The GMP stood around Rs 20 when the issue was officially announced.
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, JP Morgan, 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 on February 19. Here's what brokerage said about the IPO of Hexaware Technologies:Geojit Financial Services Rating: Subscribe for long-term Hexaware Technologies IPO is fairly valued compared to its listed peers. The government support for outsourced services and India's well-established IT infrastructure, bolstered by strong telecommunications and innovative facilities, improves the company's delivery capabilities, said Geojit. "With a consistent financial performance featuring better margins, the company is well -positioned for future success," it added with a 'subscribe' for long-term rating.
Ventura Securities Rating: Subscribe Hexaware Technologies has built a strong reputation as one of India’s leading AI-driven digital solutions providers, consistently innovating and expanding its service offerings over the past decade, said Ventura Securities. "Compared to peers like Persistent Systems and Coforge, Hexaware has a moderate valuation," it said with a 'subscribe' rating.
SMC Global Securities Rating: Subscribe for long-term Hexaware Technologies is a well-established IT services company with a strong track record, providing advanced automation and cloud solutions through its platforms. Its expansion plans into Tier-II Indian cities and new delivery centers could drive growth. Its AI-driven solutions give it a competitive edge. It is suitable for long-term investors, said SMC Global Securities.
StoxBox Rating: Subscribe Hexaware's track record of robust revenue growth, improving margins, and strong cash generation positions it well for continued success, underscoring its commitment to delivering value to stakeholders, said StoxBox. "The issue is valued at 43.1 times P/E, which is relatively cheaper compared to its peers. We recommend a 'subscribe' rating for this issue," it said.
Anand Rathi Research Rating: Subscribe Its expertise is further complemented by a mix of strategic and industry-focused partners, such as ServiceNow, offers AI-powered solutions for various business functions such as human resources, IT, customer service, security and finance, and Backbase, a banking financial technology company in the Netherlands, said Anand Rathi Research with a 'subscribe' rating citing its fair valuations.
Arihant Capital Markets Rating: Subscribe for long-term Hexaware's revenue has increased, with a focus on maintaining profitability through efficient execution and cost management. The issue is valued at a P/E ratio of 37.82 times, based on an annualized September 24 EPS of Rs 18.72. We are recommending a 'subscribe for long term' for this issue, it said.
SBI Securities Rating: Subscribe Hexaware leverages AI to build solutions for its clients driving improvement in productivity. Its dollar revenue, rupee revenue and PAT have grown at a CAGR of 14 per cent, 20 per cent and 15 per cent, respectively over CY21-23 with stable EBIT margin, said SBI Securities. It has a healthy cash balance of Rs 1,346 crore as of September 24, it added with a 'subscribe' for long term' tag.