Hexaware Technologies IPO: IT Firm Raises ₹2,598 Crore from Anchor Investors Ahead of ₹8,750 Crore Offering
Introduction
Hexaware Technologies IPO : Hexaware Technologies, a global IT services company backed by US private equity giant Carlyle, has successfully raised ₹2,598 crore from 96 institutional investors via the anchor book mechanism. This fundraising comes a day before its highly anticipated ₹8,750 crore initial public offering (IPO), which opens for public subscription on February 12 and closes on February 14.
With strong demand from both global and domestic institutional investors, the IPO is set to be one of the biggest in the Indian IT services sector. The company’s listing is scheduled for February 19, offering investors a fresh opportunity to participate in the company’s growth story.
Strong Institutional Investor Participation
Hexaware Technologies allocated 3.67 crore equity shares at ₹708 per share through the anchor book. The overwhelming response from institutional investors underscores confidence in the company’s robust business model, strong financials, and growth potential.
Global Institutional Investors Participating in the Anchor Book:
Several marquee global investors, including:
- CLSA
- Government of Singapore
- Monetary Authority of Singapore
- Smallcap World Fund
- American Funds
- Fidelity
- Abu Dhabi Investment Authority
- JP Morgan
- Custody Bank of Japan
- Goldman Sachs
- New York State Teachers Retirement System
- T Rowe Price International
- Amundi Funds
- Templeton Emerging Markets Investment Trust
- Tocu Europe
- Florida Retirement System
Domestic Institutional Investors Participating in the Anchor Book:
Major Indian financial institutions also took part, including:
- SBI Mutual Fund
- ICICI Prudential Mutual Fund
- HDFC AMC
- Kotak Mahindra AMC
- Aditya Birla Sun Life AMC
- Motilal Oswal Mutual Fund
- Axis Mutual Fund
- UTI MF
- Mirae Asset India
- Manulife Global Fund
- DSP MF
- Baroda BNP Paribas MF
Out of the total allocation, 1.31 crore shares were allotted to 15 domestic mutual funds, which applied through a total of 34 schemes.
Hexaware Technologies IPO: Key Details
- IPO Size: ₹8,750 crore (Entirely Offer-for-Sale)
- Price Band: ₹674 – ₹708 per share
- Subscription Period: February 12 – February 14
- Allotment Finalization: February 17
- Listing Date: February 19
- Issue Type: Offer-for-sale (OFS) by promoter CA Magnum Holdings
- Utilization of Funds: Since this is an OFS, proceeds will go to the promoter, not the company.
- Reservation:
- 50% for Qualified Institutional Buyers (QIBs)
- 35% for Retail Investors
- 15% for Non-Institutional Investors (NIIs)
The IPO is being managed by leading investment banks, including Kotak Mahindra Capital, Citigroup Global Markets India, JP Morgan India, HSBC Securities & Capital Markets, and IIFL Securities.
Financial Performance & Key Ratios
Hexaware Technologies boasts strong financials, making it an attractive investment opportunity. Here’s a quick look at its key financial metrics:
| Metric | Value |
|---|---|
| Market Cap | ₹43,025 Cr. |
| Current Price | ₹471 |
| Stock P/E | 43.4 |
| Book Value | ₹154 |
| Dividend Yield | 0.00% |
| Return on Capital Employed (ROCE) | 29.0% |
| Return on Equity (ROE) | 22.6% |
| Debt-to-Equity Ratio | 0.02 |
| Industry PE | 34.6 |
| Total Debt | ₹79.2 Cr. |
| PEG Ratio | 3.89 |
| Intrinsic Value | ₹625 |
| Graham Number | ₹340 |
| Piotroski Score | 8.00 |
| Price-to-Book Ratio (P/BV) | 3.05 |
| Number of Equity Shares | 30.0 Cr. |
| Return on Invested Capital (ROIC) | 24.0% |
With a low debt-to-equity ratio of 0.02, a high ROCE of 29.0%, and a healthy ROE of 22.6%, Hexaware Technologies exhibits strong financial health.
Should You Invest in the Hexaware Technologies IPO?
Reasons to Consider Investing:
- Strong Institutional Demand: High participation from marquee investors indicates confidence in the company’s future growth.
- Robust Financials: With a high ROE, ROCE, and low debt, Hexaware is financially strong.
- Growth in IT Services: The IT services industry is witnessing sustained growth due to digital transformation trends.
- Attractive Valuation: The company’s intrinsic value (₹625) is close to the upper IPO price band (₹708), suggesting potential upside.
Risks to Consider:
- High Industry Competition: IT services is a competitive industry, with major players like TCS, Infosys, and Wipro.
- Market Volatility: Stock market fluctuations can impact the listing price and future performance.
- Offer-for-Sale Structure: Since this IPO is an OFS, no fresh funds will be injected into the company.
Final Thoughts
Hexaware Technologies’ IPO is set to be one of the biggest in the IT sector, attracting strong demand from institutional investors. With solid financial performance, low debt, and a growing industry backdrop, the company presents an exciting opportunity for investors.
However, potential investors should weigh industry risks and the OFS structure before making a decision. If market conditions remain stable, the stock could see a strong listing, rewarding early investors.
Are you considering investing in Hexaware Technologies’ IPO? Let us know your thoughts in the comments below!
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.