Hexaware Technologies shares list at 5% premium; beat estimates

Shares of Carlyle Group-backed Hexaware Technologies, which raised ₹8,750 crore in the largest ever IPO by an Indian IT services company, made a decent debut on stock exchanges on Wednesday. Hexaware shares got listed at ₹745.50 on the NSE with a market capitalisation of ₹ 45,303.64 crore, a premium of 5.3% over the initial public offering (IPO) price of ₹708. On the BSE, the IT stock opened 3.25% higher at ₹731, with a mcap of ₹44,422.5 crore.

Post listing, Hexaware share price gained as much as 7.9% to ₹763.65 on the NSE, while it touched a high of ₹765 on the BSE. Meanwhile, the equity benchmarks Sensex and Nifty were trading 0.2% higher after a flat start, tracking mixed cues from global peers.

Listing beats estimates

The debut of Hexaware Technologies shares was better than the Street expectations as the stock was trading flat in the grey market. The grey market premium (GMP) of the IT stock had turned zero in the unlisted market, signaling the listing to be around issue price. The Hexaware Technologies IPO GMP touched a peak of ₹11 on February 8, while it started sliding after that amid weakness in the secondary market.

Hexaware Technologies’ IPO subscribed 2.79 times

The IPO of IT services company, which was entirely an offer for sale of 12.36 crore shares by promoter entity, was subscribed 2.79 times as it received bids worth ₹17,193.42 crore for its ₹8,750 crore issue. The qualified institutional buyer (QIB) segment led the subscription race, with the quota reserved for them receiving 9.55 times bidding. Despite strong response from QIBs, the issue failed to attract retail and non-institutional investors (NIIs) as the portions reserved for them failed to fully subscribe. The NII quota was booked 0.21 times and that of retail got 0.11 times bidding. The company had reserved 50% of the shares for QIBs, 15% for NIIs, and remaining 35% for retail investors.

The ₹8,750 crore IPO of Hexaware was 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 declined to 74.1% from 95.03%.

A day ahead of opening of the IPO, the Mumbai-based company raised ₹2,598 crore from anchor investors at upper end of its price band of ₹674-708 per share. The technology services company allocated 3.67 crore equity shares to the anchor investors, of which 1.31 crore shares, (i.e. 35.85 % of the total allocation) were allotted to 15 domestic mutual funds through a total of 34 schemes.

The IPO of Hexaware is the largest 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.

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