Hexaware's $1 Billion IPO Attracts Institutional Investors Despite Market Turmoil
Deal News | Feb 14, 2025 | Zawya
Hexaware Technologies, a leading Indian IT exporter, has successfully secured full subscription for its $1 billion initial public offering (IPO), marking the largest IPO in India for the year. Despite a turbulent stock market environment, characterized by a 3% decline in India's Nifty 50 index and broader economic concerns, the IPO was largely buoyed by institutional investors, including foreign investors and mutual funds, who subscribed to 2.7 times the shares on offer. Carlyle, the top shareholder, is divesting approximately 21% of its stake while the company issues no new shares. However, retail interest was notably low, with retail investors bidding for merely 11% of the reserved shares, reflecting cautious sentiment about short-term gains and muted grey market premiums. Hexaware, which was privatized by Baring Private Equity Asia in 2020 and saw significant acquisition by Carlyle in 2021, is expected to list the stock on February 19.
Sectors
- Information Technology
- Financial Services
- Private Equity
Geography
- India – The primary focus is on Hexaware Technologies, an Indian company conducting its IPO on Indian stock exchanges.
Industry
- Information Technology – The article focuses on Hexaware Technologies, an Indian IT exporter involved in a significant IPO within the tech industry.
- Financial Services – The IPO process and stock market activities highlight the financial services sector, particularly investment banking and equities.
- Private Equity – Carlyle's significant stake sale as a Private Equity firm highlights relevant financial operations within this sector.
Financials
- $1 billion – The total value of Hexaware Technologies' initial public offering.
- 430 billion rupees ($4.96 billion) – The targeted valuation for Hexaware Technologies at the upper end of its IPO price band.
- 2.7 times – The subscription level of Hexaware's IPO led by institutional buyers.
- 21% – The percentage of Carlyle's stake in Hexaware being sold in the IPO.
- $1 = 86.7170 Indian rupees – The exchange rate used in the article for currency conversion.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Hexaware Technologies | Target Company | Company | An Indian IT exporter conducting a $1 billion IPO, marking the largest IPO in India for 2024. |
| Carlyle | Selling Company | Company | A Private Equity firm selling about 21% of its stake in Hexaware during the IPO. |
| Institutional Investors | Bidders | Company | Comprising foreign investors and mutual funds showing significant interest in Hexaware's IPO. |
| Baring Private Equity Asia (BPEA) | Former Owner | Company | Previously took Hexaware private in 2020 before Carlyle's acquisition in 2021. |
| Nandan Mandayam | Journalist | Person | A reporter covering the subject for Zawya. |
| Narendra Solanki | Head of Research | Person | Responsible for providing insights on the market sentiment. |
| Arun Kejriwal | Research Analyst | Person | Founder of Kejriwal Research, commented on the IPO and market conditions. |
| Anand Rathi | Research Firm | Company | Provided market analysis and insights on Hexaware's IPO. |