Hexaware Technologies IPO subscribed 2.7 times, driven by strong QIB demand

In a tough market environment, Hexaware Technologies’ IPO managed to garner 2.7 times subscription, thanks to bids from qualified institutional buyers (QIBs). The successful closure of the Rs 8,750 crore IPO—the largest ever for an IT services company in India—paves the way for the Carlyle Group-owned firm to relist on domestic bourses. The QIB portion of the issue garnered 9.1 times subscription.

 

Meanwhile, the retail, high net worth individual (HNI), and employee portions garnered just 11 per cent, 20 per cent, and 32 per cent subscription, respectively.

 

The company had allotted shares worth almost Rs 2,600 crore to anchor investors. The IPO price band is set at Rs 674-708 per share, valuing Hexaware at Rs 43,025 crore. The IPO is an entirely secondary sale by private equity major Carlyle, whose stake will now reduce from 95.5 per cent to 74.7 per cent.

 

 

Hexaware had voluntarily delisted from Indian stock exchanges in November 2020, when Baring Private Equity was the controlling stakeholder. In 2021, the company was acquired by CA Magnum Holdings, a Carlyle affiliate, for approximately $3 billion.

 

"The company is valued at 2024e (annualised) P/E of 37.6x, which is relatively cheaper than its peers. Hexaware’s dollar revenue, rupee revenue, and PAT have grown at a CAGR of 14 per cent, 20 per cent, and 15 per cent, respectively, from 2021 to 2023, with a stable EBIT margin. 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," SBI Securities has said in a note. 

ICICI Securities settles issue of non-compliance with Sebi 

ICICI Securities has reached a settlement with the Securities and Exchange Board of India (Sebi) regarding alleged non-compliance with regulatory norms. The settlement involves a payment of Rs 80.46 lakh to Sebi. The regulator conducted a joint inspection with NSE of the ICICI Securities from April 1 to May 31, 2023. Sebi had alleged certain non-compliances, which included adhering to terms and conditions under margin trading  facility and not reporting technical glitches to the exchanges. BS reporter