Hexaware Tech to raise ₹8,750 cr in India’s largest IT services IPO; sets price band at ₹674-708

Homegrown technology services company Hexaware Technologies has set a price band of ₹674-708 per share for its upcoming initial public offering (IPO), which will open for subscription on February 12. The company looks to raise ₹8,750 crore at the upper end of the price band via IPO route, which is entirely and offer for sale (OFS) of shares by promoter CA Magnum Holdings, a subsidiary of U.S. private equity firm Carlyle Group Inc. Post-IPO, Carlyle's shareholding will decline to 74.1% from the current level of 95.03%.

The IT services company has cut issue size from ₹9,950 crore proposed in the Draft Red Herring Prospectus (DRHP) without citing any specific region. As the IPO is completely an OFS, all the capital proceeds will go directly to the selling shareholder, and the company will not receive any fund from it.

If successful, it would be the largest IPO in the IT services segment since Tata Consultancy Services' ₹4,700 crore IPO in 2004. The company, engaged in the business of global digital and technology services with artificial intelligence, competes with firms like Coforge, LTIMindtree, Mphasis, and Persistent Systems.

Here’s all you need to know about Hexaware Tech IPO

The anchor book of the Mumbai-headquartered company will open on February 11, while the public offer will close on February 14. The share allotment is expected to be finalised on February 17, and the stock is expected to be listed on BSE and NSE on February 19. Ahead of opening of the IPO next week, Hexaware shares were commanding a grey market premium (GMP) of ₹30 over the issue price in the unlisted market.

This would be the second time when Hexaware Technologies will list its shares on the domestic bourses. The IT services company went public in June 2002 and was delisted from the stock market in November 2020 at a price of ₹475 per share after the company's former promoter, Bearing Private Equity Asia, made the decision to take the company private.

In October 2021, the Carlyle Group acquired a 62% stake in Hexaware Technologies from Baring Private Equity Asia for nearly $3 billion and further raised the shareholding in the company to up to 95%.

Hexaware Technologies is a mid-sized IT service provider, operating in 28 countries with a team of 31,870 employees as of June 30, 2024. It has a global presence comprising 38 delivery centers supported by 16 offices spread across the Americas, Europe and Asia–Pacific region.

The company-led by CEO Srikrishna Ramakarthikeyan claims to be one of the fastest-growing technology services companies in India, with over $1,000 million in revenue from operations in each of the financial years 2023 and 2022, according to the Everest Report mentioned in the DRHP. “The revenue from operations grew at a CAGR of 13.7% (in dollar terms) from the financial year 2021 to the financial year 2023, while according to the Everest Report, the global outsourced IT-BP services industry grew at a CAGR of 7.3% during the same period,” it says in the DRHP.

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