Hexaware Technologies IPO Day 3: Issue subscribed 2.79 times; QIB portion leads

Hexaware Technologies IPO Day 3: Hexaware Technologies Ltd’s initial public offering (IPO) fully subscribed on the last day of the bidding process, February 14. The IT firm saw an overall subscription of 2.79 times.

As per NSE data, the IPO received bids for 24,28,44,315 shares against the total offer size of 9,14,23,354 shares.

The qualified institutional buyers (QIBs) segment saw 9.09 times subscription, while retail individual investors (RIIs) subscribed to 11 per cent. The non-institutional investors (NIIs) portion was subscribed 20 per cent.

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Ahead of the IPO, Hexaware raised Rs 2,598 crore from anchor investors. At the upper end of the price band, the company commands a valuation of over Rs 43,000 crore. The IPO is a pure offer for sale (OFS), with promoter CA Magnum Holdings, an affiliate of the Carlyle Group, offloading equity shares worth Rs 8,750 crore.

The company is making a comeback to the country's capital market after its delisting in 2020.

Should you subscribe Hexaware Technologies IPO?

Most analysts have recommended subscribing to Hexaware Technologies Ltd’s IPO, though some maintain a neutral stance. The company’s price band is considered reasonable compared to its industry peers.

SBI Securities advises investors to subscribe at the cut-off price with a long-term perspective, noting that Hexaware is priced attractively relative to its peers at the upper band of Rs 708. "It has a healthy cash balance of Rs 1,346 crore as of September 2024," analysts at the brokerage wrote in a research report.

Bajaj Broking also recommends a long-term investment, citing Hexaware’s consistent outperformance against competitors and confidence in sustaining its growth trajectory. However, it notes that the IPO appears to be fully priced.

Similarly, Anand Rathi finds the issue fairly valued, while Ventura Securities, which has not assigned a rating, describes Hexaware’s valuation as moderate and in line with competitors such as Persistent Systems and Coforge.

KRChoksey maintains a neutral stance, citing macroeconomic uncertainties and competitive pressures within the sector as key risks for investors.

Hexaware Technologies: Company overview

Hexaware Technologies is a global IT services provider specializing in artificial intelligence (AI)-driven solutions, digital transformation, and cloud computing. The company caters to six major industries, including banking, healthcare, and manufacturing, offering services such as software development, cybersecurity, and data analytics. Leveraging AI-powered platforms like RapidX, Tensai, and Amaze, Hexaware helps businesses optimize operations and enhance efficiency worldwide.

The company was previously owned by Baring Private Equity Asia and was delisted in 2020. In October 2021, Carlyle Group acquired a controlling stake in Hexaware, further strengthening its market position.