Hexaware Technologies IPO: Price Band, Financials, Key Dates, GMP And More — All You Need To Know

Information technology consulting and services company Hexaware Technologies Ltd.'s initial public offering is scheduled to open on Feb. 12.

The price band for the IPO has been set in the range of Rs ⁠674 to Rs 708 per share. The market value at the upper end of the price band is Rs 43,025 crore, as per NDTV Profit's calculations. Bids can be made for a minimum of 21 shares, and then in multiples thereof.

⁠The company will not issue any fresh shares, and the IPO will consist entirely of an offer for sale worth Rs 8,750 crore, according to the red herring prospectus. The OFS will entail sale of equity by company's promoter CA Magnum Holdings.

In November 2020, Hexaware Technologies' shares were delisted from the Indian stock exchanges after the company's promoters agreed to a delisting price of Rs 475 per share. This marked the first successful delisting on Indian bourses since December 2018.

A year later, in October 2021, the Carlyle Group, a US-based private equity firm, acquired a majority stake in Hexaware from Baring Private Equity Asia for approximately $3 billion.

The company filed its draft papers for the book built public issue in September last year, initially planning to raise Rs 9,950 crore. The offer size was later reduced.

Kotak Mahindra Capital Co., Citigroup Global Markets India Pvt., JPMorgan India Pvt., HSBC Securities and Capital Markets (India) Pvt. and IIFL Securities Ltd. are the book-running lead managers to the issue. KFin Technologies Ltd. is the registrar to the offer.

The equity shares are proposed to be listed on both the BSE and National Stock Exchange. The company will not receive any proceeds from the offer, as the funds raised will go to the promoter selling the shares.

• Issue opens: Feb. 12.

• Issue closes: Feb. 14.

• Issue price: Rs 674–708.

• Offer for sale: Rs 8,750 crore.

• Fresh issue: Nil.

• Total issue size: Rs 8,750 crore.

• Lot size: Minimum 21 shares, and then in multiples thereof.

Hexaware is a digital and technology services company providing solutions with artificial intelligence.  

Hexaware, which was acquired by global investment firm Carlyle Group Inc. from Baring Private Equity Asia in 2021, offers a range of services, including IT, business process outsourcing, cloud computing, data analytics and artificial intelligence solutions.

The company reported a 12.8% rise in revenue at Rs 10,380 crore in the calendar year 2023 from Rs 9,199.60 crore in the previous fiscal. Net profit was up 12.8% to Rs 998 crore.

Operating income, or earnings before interest, taxes, depreciation, and amortisation, rose to Rs 1,581 crore in the same period. The Ebitda margin expanded to 15.23% from 13.28%.

As of Nov. 30, 2024, the company's debt pile stood at Rs 2.54 crore.

The IT major's listed peers include Persistent Systems Ltd., Coforge Ltd., LTIMindtree Ltd., and Mphasis Ltd. Here is how its performance stacks up against them:

• Geographic Revenue Exposure: A significant portion of the company's revenue is derived from the Americas and Europe. Adverse changes in economic conditions in these regions could negatively impact the company’s business.

• Customer Concentration Risk: A substantial portion of revenue is dependent on certain key customers, and the company is often not their exclusive IT services provider. Failure to retain and grow the existing customer base may adversely affect the company's business and financial performance.

• Foreign Exchange Risk: The company is exposed to foreign exchange-related risks.

• Anti-Outsourcing Legislation: The potential adoption of anti-outsourcing legislation could hinder the company's ability to compete effectively in global markets.

• AI and Generative AI Risks: The development and use of artificial intelligence, particularly generative AI, could lead to operational changes for customers, legal or regulatory challenges, reputational damage, or other significant business risks. The integration of Gen AI in the company's tools and platforms may also introduce additional data security and privacy concerns.

The grey market premium of the Hexaware Technologies IPO is Rs 3.5 as of 12:58 p.m. on Feb. 11, according to InvestorGain. This implies shares of the company will likely list at Rs 711.5 apiece, indicating a 0.49% premium to the upper end of the price band.

It should be noted that GMP or grey market price is not an official price quote for the stock and is based on speculation.

Disclaimer: Investments in initial public offerings are subject to market risks. Please consult with financial advisors and read red herring prospectus thoroughly before placing bids.