Is Hexaware Technologies' Rs 8,750 Cr IPO the Investment Opportunity of 2025?

Hexaware Technologies, a prominent player within the IT services sector, is set to make a sizable return to the Indian stock markets with its Initial Public Offering (IPO) scheduled from February 12 to 14, 2025. The business enterprise aims to raise ₹8,750 crore via this IPO, marking one among the most important services in India's IT industry yet so far since after TCS. 

The Hexaware Technologies IPO, aiming to raise ₹8,750 crore, is one of the most talked-about public services of 2025. This isn't just the first time Hexaware is coming into the stock market for public listing. The CA Magnum Holdings, the promoter entity, a part of the Carlyle Group Inc holds 95.03% ownership in Hexaware and would receive the proceeds from the stake sale. Now, Carlyle group is looking to sell part of its stake via this IPO. The move is visible as a way to offer liquidity to Carlyle while allowing public investors to take part in Hexaware’s increased growth tale.

Hexaware Technologies Delisting History

The company was previously listed but delisted in 2020. In 2020, Hexaware decided to delist from Indian stock exchanges following a successful buyout by a firm recognized as BPEA. 

In 2020, Baring Private Equity Asia (“BPEA”) through its affiliated entities HT Global Holdings B.V. (“the Acquirer”) and HT Global IT Solutions Holdings Limited has agreed to take Hexaware Technologies Limited (“Hexaware”) private through an ongoing delisting process. 

Under the transaction, the Acquirer purchased a ~ 29% stake from public shareholders, increasing the combined ownership of BPEA-controlled entities to approximately 91%.

Nearly a year after delisting, Carlyle Group, an international investment firm, obtained an overall controlling stake in the organisation for ~ $3 billion bought from Baring Private Equity Asia in October 2021.

Now, Hexaware is making a comeback return with its second time IPO, and investors are keen to know if this is the right opportunity to invest. This article delves into the information about the Hexaware IPO, discusses the organization's financial performance, and future growth and assesses whether or not this Hexaware Share Price Target in 2025 IPO offers a compelling investment opportunity. 

Industry Position and Market Potential

The IT services sector in India has been experiencing a huge boom, driven by means of digital transformation projects throughout industries. Hexaware's emphasis on an AI-first technique and its different service offerings position it well to capitalize on these trends.

Hexaware Technologies has established a sturdy and various revenue stream with a diversified geographical presence. This diverse geographical presence, with a notable exposure to Europe, reduces Hexaware's dependency on the Americas and mitigates local regional economic risks. Additionally, the company's tremendous onshore useful resource base affords opportunities to grow its offshore blend, doubtlessly improving cost efficiencies.

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Hexaware additionally has a huge blend of revenue throughout some other essential business segments, particularly, Financial Services, Healthcare and Insurance, Manufacturing and Consumer, and Hi-tech and Professional Services, generating over $200 million in sales and revenue.

Hexaware Technologies: Financial Performance

Hexaware Technologies has showcased the well stable performance over the years along with consistent financial growth over the years, The company has proven constant growth in revenue that is increasing from ₹9,378 crore in FY22 to ₹10,389 crore in FY23. However, the financial results for the nine months ending September 30, 2024, the enterprise presented a net earnings profit after tax of ₹853 crore with a revenue of ₹8,594 crore. Despite this, Hexaware’s cognizance particularly on AI, automation solutions and worldwide expansion has kept investors optimistic about its future growth.

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Hexaware Technologies IPO Details: What You Need to Know

The Hexaware Technologies IPO is entirely an Offer for Sale (OFS) portion of the issue, which means the enterprise isn’t raising fresh issue  capital. Instead, Carlyle Group’s conserving corporation, CA Magnum Holdings, is promoting its shares to the general public. The IPO issue size became first of all planned at ₹9,950 crore however was revised to ₹8,750 crore after filing of its RHP due to ongoing market conditions.

The price band for the IPO is about planned between ₹674 to ₹708 per share, and the issue will open for subscription from February 12 to February 14, 2025. The IPO shares are going to finally list on the stock exchanges including BSE, NSE platforms on February 19, 2025.

The upcoming hexaware IPO has an allocation portion of the IPO structure designed as allocated towards 50% of shares to Qualified Institutional Buyers (QIBs), 15% to Non-Institutional Investors (NIIs), and 35% to retail investors. Additionally, eligible employees will acquire a discount of ₹67 per share on reserved shares that worth ₹90 crore.

IPO Details	Description
IPO Start Date	12 February, 2025
IPO End Date	14 February, 2025
IPO Allotment Date	17 February, 2025
IPO Listing Date	19 February, 2025
IPO Issue Size	₹8,750 Cr
IPO Price Band	₹674 to  ₹708 per share
Lot Size	21 Shares

Hexaware Share Price: Grey Market and Valuation

The Hexaware Share Price in the grey market (an unofficial market wherein stocks are traded before list) has clearly demonstrated mild and moderate demand, with a Grey Market Premium (GMP) ranging between ₹19 and ₹42 per share. This suggests that investors are cautiously positive and optimistic towards the IPO and need to see the sentiment towards Hexaware IPO price. The Hexaware Technologies unlisted share price is presently trading around  ₹1025 per share in the pre-IPO market.

If we talk in general about the IPO scenario it presented at the upper end of the price band (₹708 per share), Hexaware’s market capitalization is predicted to attain around ₹43,025 crore and in some sources it will be around ₹43,247 crore . The other metrics such as company KPIs including Price-to-Earnings (P/E) ratio of 41x is better than some peers like Mphasis (34x) however lower than Persistent Systems (84x). While this valuation displays Hexaware’s sturdy marketplace position, it also raises questions about whether the shares are priced too excessive.

Hexaware Technologies IPO: Lead Mangers and Registrar

Hexaware has appointed some of the largest names in investment banking in order to smooth handling for the operations and processes of its IPO along with corporations and lead managers such as Kotak Mahindra Capital Co. Ltd, Citigroup Global Markets India Pvt. Ltd, JP Morgan India Pvt. Ltd, HSBC Securities and Capital Markets India Pvt. Ltd and IIFL Securities Ltd, making sure a simpler and successful IPO process for investors. Kfin technologies might be appointed as registrar for this public issue. 

Growth Opportunities for Hexaware

1. AI and Cloud Services: Hexaware sole focus on AI and cloud computing positions it well to benefit from the developing demand for digital transformation.

   
   

2. Global Expansion: The enterprise plans to make bigger expansion for  its operations, which includes setting up delivery centres & facilities in Tier-2 cities like Ahmedabad, to tap into new talent pools and decrease costs.

   
   

3. Diverse Client Base:The company having operations with 31 Fortune 500 customers and a presence in 28 international locations, Hexaware has a solid revenue flow and significant boom potential for the near future.

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Risks and Challenges  to Consider

• Premium Valuation: The IPO is priced at a P/E ratio of 41x, which is higher than some competitors. This can result in restricting short-term gains for investors.

  
  

• No Fresh Capital: Since the IPO is entirely an OFS, Hexaware won’t receive any funds for expansion or debt reduction. With this approach the enterprise will require to rely on its existing resources for growth.

  
  

• Geographical Risks: Hexaware's revenue is heavily reliant on the Americas and Europe, contributing over 90% of its earnings. Any market and economic downturn in those areas could considerably impact the company's financial stability.

Hexaware Share Price Target in 2025

Analysts expect that the Hexaware Technologies Share Price may want to see a mild and slightly moderate increase post-listing, driven by  its robust market position and AI-driven strategy. However, the company premium valuation and lack of fresh capital may limit some short-term gains for investors. Long-term investors, then again, may also benefit from Hexaware’s global expansion and focus on potential high-growth sectors like AI and cloud services.

Should You Invest in the Hexaware Technologies IPO?

The Hexaware Technologies IPO came up with an investment in a global IT leader with a sturdy and entire focus on AI and digital transformation. In terms of long-term investors, this could be a significant chance to be a part of a growing company with a strong track record of financials and growth prospects However, the thorough analysis and comprehensive market outlook within the IT sector that investors need to carefully consider to make informed decisions.

Final Thoughts

The Hexaware Technologies IPO can be seen as a landmark event in India’s IT services sector as this IPO is the another public debut since the listing of TCS IPO in IT sector. As we explored that the company's growth potential makes it an appealing investment yet another, the premium valuation and lack of fresh capital are  concerns to keep in consideration. There needs to be thorough analysis with any IPO and  it’s critical to do your research, recognize the risks, and discuss with a financial consultant before making a decision.

The Hexaware Share Price in grey market would be cautiously watched by investors and analysts alike. Whether this IPO will become the worth investment opportunity of 2025 depends on how well Hexaware executes its growth performance and navigates the demanding situations beforehand. A successful listing might mark the return of Hexaware to the domestic bourses after 22 years. Ultimately, the decision to invest in the Hexaware Technologies IPO should align with individual investment goals and risk appetite .