The company is now returning to the public market with a substantial offering
Hexaware Technologies is preparing for a significant market comeback with its upcoming Initial Public Offering (IPO). The company, which was previously listed and later delisted in 2020 following its acquisition by The Carlyle Group, is now returning to the public market with a substantial offering. This move marks a major milestone in the Indian IT services sector, reflecting the growing investor confidence in technology-driven enterprises.
The IPO launch is scheduled for February 12, 2025, and is expected to be one of the largest public offerings in India’s IT sector. The company aims to leverage its strong market position, financial performance, and industry expertise to attract investors.
IPO Structure and Key Details
Hexaware Technologies is set to raise ₹8,750 crore through this IPO. The price band for the issue has been set between ₹674 and ₹708 per share. Unlike other IPOs that involve a combination of fresh issue and Offer for Sale (OFS), this one is a 100% Offer for Sale.
The promoter, CA Magnum Holdings, a part of The Carlyle Group, will reduce its stake from 95% to approximately 74.1% post-listing. The public subscription period will be open from February 12 to February 14, 2025, with the allotment finalization expected by February 17. The shares are expected to be listed on the stock exchanges on February 19, 2025.
This IPO is set to be the largest-ever IT sector IPO in India, surpassing the record previously held by Tata Consultancy Services (TCS), which raised ₹4,713 crore in 2004. The scale of this offering underscores the strategic importance of Hexaware Technologies in the Indian IT market.
Financial Performance and Growth
Hexaware Technologies has demonstrated strong financial performance over the years, making it an attractive choice for investors. For the nine months ending September 30, 2024, the company reported:
- Revenue of ₹8,820 crore, up from ₹7,764.30 crore in the same period the previous year.
- Net profit of ₹857.5 crore, compared to ₹804.8 crore in the previous year.
These figures indicate a consistent growth trajectory, with stable profitability and expanding revenues. The company’s business model revolves around digital transformation, cloud services, and artificial intelligence-driven solutions, making it a high-growth IT firm in an era where digital adoption is accelerating globally.
Sector Positioning and Business Strengths
Hexaware Technologies operates in key industries such as:
- Financial Services – Providing AI-driven solutions for banking and insurance.
- Healthcare & Life Sciences – Offering digital solutions for patient management and medical research.
- Manufacturing & Consumer Goods – Delivering enterprise solutions to enhance efficiency.
- Travel & Transportation – Optimizing digital services for aviation and logistics.
With a strong presence in these sectors, Hexaware has positioned itself as a leader in digital transformation and cloud computing solutions. The demand for IT services, particularly in the fields of automation, analytics, and cybersecurity, continues to grow, placing the company in a favorable position for future expansion.
Investor Sentiment and Grey Market Premium (GMP)
Investor sentiment toward Hexaware’s IPO has been moderate, as reflected in the Grey Market Premium (GMP). As of February 10, 2025, the GMP stood at ₹8 per share, indicating a slight premium over the IPO price band. While this suggests demand among investors, the muted GMP movement implies a balanced risk-reward scenario.
Several factors are influencing investor sentiment, including:
- The company’s strong revenue growth and profitability.
- The size of the IPO and its impact on market liquidity.
- Global market conditions, especially the performance of the IT sector.
- The valuation of Hexaware Technologies compared to peers like TCS, Infosys, and Wipro.
The GMP performance suggests that long-term investors might be more interested than short-term speculators, as the company’s fundamentals indicate steady growth potential.
Market Challenges and Risks
Despite its strengths, the IPO is not without risks. Some of the key challenges include:
Global Economic Conditions – The IT sector is highly dependent on global demand, and any slowdown in key markets like the United States and Europe could impact revenues.
Competition from Larger IT Firms – Companies like TCS, Infosys, and HCL Technologies continue to dominate the sector, making it challenging for mid-sized firms to expand market share.
Employee Costs and Retention Issues – The IT industry faces rising wage costs and high attrition rates, which can affect profit margins.
Regulatory Uncertainty – Changes in data protection laws, export restrictions, or tax policies could create hurdles for the company’s international operations.
Investors will be closely monitoring these risks while assessing Hexaware’s potential as a long-term investment.
Use of IPO Proceeds
Since this IPO is an Offer for Sale (OFS), no new capital is being raised by the company. Instead, Carlyle Group will be partially offloading its stake, which means that the proceeds will go to the existing shareholder rather than being used for business expansion.
While this structure does not directly provide capital for growth, it enhances liquidity and market visibility for Hexaware Technologies, potentially boosting its valuation in the long run.
How Hexaware Compares to Industry Peers
Hexaware Technologies operates in the highly competitive IT services industry. A comparison with key competitors provides insights into its market positioning:
| Company | Market Cap (₹ Crore) | Revenue Growth | Net Profit Margin | Debt Levels |
| TCS | 15,00,000 | Stable | High | Low |
| Infosys | 8,50,000 | Strong | Moderate | Low |
| Wipro | 3,50,000 | Moderate | Moderate | Low |
| Hexaware | 9,000 (Pre-IPO) | Strong | High | Low |
Hexaware’s growth rate and profit margins are competitive, but its smaller scale relative to industry giants means it has room to expand. Investors seeking high-growth IT stocks may find Hexaware an attractive mid-cap opportunity.
Outlook for Hexaware Technologies Post-IPO
Hexaware’s re-listing on the stock market is a significant event for the Indian IT sector. The company has demonstrated strong growth, financial stability, and a well-defined strategy to capitalize on emerging digital trends.
The IPO pricing suggests a fair valuation, making it an attractive opportunity for long-term investors focused on digital transformation trends. However, global economic uncertainty, industry competition, and evolving market dynamics will be critical factors influencing its stock performance after listing.
Market participants will be closely watching the listing day performance to gauge investor confidence and demand. If the stock sees strong buying interest post-listing, it could signal long-term growth potential for Hexaware in the Indian IT landscape.
Hexaware Technologies’ return to the stock market marks an important milestone for the company and the broader IT industry. With a robust financial foundation, strategic market positioning, and a strong IPO structure, the offering presents an exciting investment opportunity.
The performance of this IPO will serve as a barometer for investor confidence in mid-sized IT firms and the overall market appetite for digital transformation-driven businesses. The listing on February 19, 2025, will be a key event to watch as the company makes its much-anticipated comeback.
