Hexaware Technologies IPO Day 3: Check GMP, allotment date, subscription status & more

The initial public offering (IPO) of Hexaware Technologies continued to attract a muted response from the investors during the third and final day of the bidding process. The issue was overall subscribed only four per cent on day one and ended day two with 16 per cent subscription.
 

Hexaware Technologies is selling its shares in the price band of Rs 674-708 apiece. Investors can apply for a minimum of 21 shares and its multiples thereafter. It is looking to raise Rs 8,750 crore via IPO, which is entirely an offer-for-sale (OFS) of up to 12,35,87,570 equity shares by the promoters and existing shareholders of the company.

According to the data, the investors made bids for 3,40,13,721 equity shares, or 0.37 per cent, compared to the 9,14,23,354 equity shares offered for the subscription by 12.30 pm on Friday, February 14, 2025. The three-day bidding for the issue, which kicked off on Wednesday, February 12, shall conclude today.

The allocation for qualified institutional bidders (QIBs) was subscribed 1.13 times. However, the portion reserved for non-institutional investors (NIIs) saw a subscription of only 5 per cent and the quota set aside for retail investors saw bids for merely 8 per cent of their allocation. Portion allocated towards employees was booked 22 per cent.

Incorporated in 1992, Navi Mumbai-based Hexaware Technologies is engaged in the business of global digital and technology services with artificial intelligence. The company uses technology to offer innovative solutions, integrating AI to help customers adapt, innovate, and improve in the AI-driven world.

The grey market premium (GMP) of Hexaware Technologies has seen a sharp correction on the back of dull bidding for the issue and dented market sentiments. Last heard, the company was commanding a premium of merely Rs 2 per share in the unofficial market, suggesting a flat listing for investor investors. The GMP stood around Rs 20 before the issue kicked off.

Brokerage firms are mostly positive on the issue but for a long-term perspective citing its strong financial, experienced management, cash flow status of the company, long standing relation with the existing customers and reasonable valuations. However, the complete OFS nature of the business, dependence of US and European clients and currency fluctuation are key concerns.

The government support for outsourced services and India's well-established IT infrastructure, bolstered by strong telecom and innovative facilities, improves the company's delivery capabilities, said Geojit Financial. "With a consistent financial performance featuring better margins, the company is well positioned for future success," it added with a 'subscribe for long-term' rating.

Hexaware Technologies has reserved shares worth Rs 90 crore for its eligible employees, who will get a discount of Rs 67 per share in the IPO. It has reserved 50 per cent of the shares for qualified institutional bidders (QIBs), while non institutional investors (NIIs) will have 15 per cent for the allocations. Retail investors shall get 35 per cent of the reservation in the issue.

Hexaware Technologies has shown consistent revenue and profit growth, with a 13.7 per cent CAGR in revenue from FY21-23, outperforming the  industry growth of 7.3 per cent. It posted a net profit of Rs 997.6 crore in CY23 and Rs 853.3 crore in 9MCY24, with stable PAT margins around 9.6-10 per cent, said Ventura Securities.

"The issue is priced at a P/E of 37.8-43.1 times based on CY24 earnings, making it appear fully valued. Compared to peers like Persistent Systems and Coforge, Hexaware Technologies has a moderate valuation," it added with a 'subscribe' rating.

Kotak Mahindra Capital, Citigroup Global Markets India, JP Morgan India, HSBC Securities & Capital Markets and IIFL Securities are the book running lead managers of the Hexaware Technologies IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both NSE and NSE.