Hexaware shares debuted at ₹745.50, at a 5 per cent premium over the offer price band on the NSE and ended the day at ₹755.75. On the BSE the share listed at a 3.14 per cent premium at ₹731, and closed at ₹763.85.
Largest IPO
The initial public offering (IPO) of the global IT services company was the largest in IT services aggregating up to ₹8,750 crore with a price band fixed from ₹674 to ₹708 per equity share.
As per Carlyle, the company’s total IPO issue size of $1 billion makes it the largest IPO globally in over a decade for tech services. Carlyle acquired Hexaware in 2021 through a global cross-platform deal.
Kapil Modi, Managing Director, Carlyle India Advisors, said, “We congratulate Hexaware’s exceptional management team on this milestone. Carlyle remains committed to partnering with the Hexaware team.”
R Srikrishna, CEO, Hexaware, said, “This is an opportunity to deepen our relationships with stakeholders and reinforce our commitment to operating with transparency, accountability, and a focus on delivering meaningful solutions to our clients.”
On the market opportunities for the company, Bajaj Broking earlier said, that the application services market will reach ₹32.4-33.2 trillion by 2029, with a 4.8 per cent CAGR. It expected software product engineering services, to grow at a 13-14 per cent CAGR. The global cloud and infrastructure services market, is estimated to grow at a 7.5 per cent CAGR from 2024 to 2029. Further, the global enterprise platform IT services market, is projected to grow at a 6.5 per cent CAGR from 2024 to 2029.
JM Financial projected EBITDA margin to reach 17.1 per cent in FY27E, an expansion of 170 bps over CY23-27E, driven by 120bps improvement in adjusted EBITDA margin and reduced one-off expenses.
“We believe Hexaware has multiple traditional levers still to pull such as offshoring, utilisation, sub-con and pyramid. We expect the one-time costs of ESOP, ERP implementation, severance and acquisition-related costs to subside, driving the margin expansion. We expect EBITDA to grow at a CAGR of 17.7 per cent over CY23-27E,” said JM Financial in a report.
Further, it expected profit after tax (PAT) to grow at a CAGR of 16.3 per cent over FY23-27E, largely due to growth and margin expansion estimates, aided by slightly higher other operating income. It initiated with a BUY and target price (TP) of ₹820, implying 16 per cent upside from the upper end of its IPO price band.
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