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Ahead of the IPO opening, the US private equity giant Carlyle-backed company has garnered ₹2,598 crore from 96 institutional investors including CLSA, Government of Singapore, Monetary Authority of Singapore, JP Morgan, Goldman Sachs, among others.
Hexaware Technologies IPO: Review
Anand Rathi: Subscribe
The brokerage in its note wrote that Hexaware Technologies business has evolved over the last decade, with a growing set of offerings, larger and diversified customer base, wider global delivery footprint and higher focus on innovation and technology.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.
At the upper price band, the company is valuing at a P/E (price-to-earnings) of 43.1 times, with a market capitalisation of ₹43,024.7 crore post issue of equity shares and return on net worth of 22.8%.
On the valuation front, the brokerage believes that the company is fairly priced. Thus, it has recommended a ‘Subscribe’ rating to the IPO.
Geojit: Subscribe for long-term
At the upper price band of ₹708, Hexaware is available at a P/E of 43.1x (CY23), which 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.
With a consistent financial performance featuring better margins, the company is well-positioned for future success, the brokerage said while adding a subscribe to this issue for long-term investment.
AUM Capital: Subscribe
Catering to diverse verticals as Manufacturing, Banking, Healthcare, etc. enables it to offer tailor made services to its customers and thus it makes HTL a preferred partner for them. It’s Go To Market strategy for new client acquisitions and strategic partnerships continue to pay rich dividends.Considering all the above factors, it has recommended a ‘Subscribe’ rating to the issue.
Peer comparison
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Rev
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Cy23 Rev growth |
CY22 growth
|
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Hexaware
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12.80%
|
28.20%
|
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Persistent
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17.60%
|
46.20%
|
|
Coforge
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14.50%
|
24.60%
|
|
Ltim
|
7.00%
|
27.10%
|
|
Mphasis
|
-3.80%
|
15.40%
|
Hexaware Technologies IPO: Price band
The IT services provider has fixed the price band between ₹674 to ₹708 per share. The IPO will be a pure Offer For Sale as promoter Carlyle will be selling stake.
Hexaware Technologies IPO: GMP
Ahead of the IPO launch, the grey market premium (GMP) for the company’s shares stood at ₹3.5 indicating a 0.49% premium over the issue price.
Hexaware Technologies IPO: Other details
Retail investors can bid for one lot of Hexaware’s shares in the IPO, which will include 21 shares and in multiples of that thereafter. One lot will entail a minimum investment of ₹14,868 per lot.
This will be the largest IPO by an Indian IT services company, surpassing TCS’s record in 2004, when it raised ₹4,713 crore.
Post the IPO, promoter Carlyle’s stake will be down to 74.1% from 95% currently.
At the higher end of the price band, Hexaware will have a market capitalisation of ₹43,247 crore.
Hexaware had delisted from the bourses in September 2020 when the company’s promoters accepted the delisting price of ₹475 per share.
For calendar year 2023, Hexaware’s revenue grew at 12.8% in constant currency terms, which is lower than its peers Persistent Systems and Coforge, who grew at 17.6% and 14.5% respectively but higher than LTIMindtree and Mphasis.
The Americas contributed 73.4% to Hexaware’s topline for the first nine months of financial year 2025, while the rest came from Europe and Asia Pacific. Nearly half of the company’s revenue comes from BFSI and Healthcare.
For the first nine months of calendar year 2024, Hexaware’s top five clients contributed 25.8% to the topline, while the top 10 clients contributed 35.7%.
