Hexaware stock soars on market debut, up 10% from IPO price

Hexaware Technologies, supported by Carlyle, witnessed its shares surge by up to 10% during their market debut, Reuters reported.

This jump highlighted the growing retail interest in what is considered India’s first billion-dollar IPO, which had earlier faced challenges in achieving full subscription without significant support from large institutional investors.

The stock opened on the National Stock Exchange at 745.50 rupees, higher than its initial public offering (IPO) price of 708 rupees. Despite the broader blue-chip Nifty 50 index closing slightly down, Hexaware’s stock concluded the day at 762.55 rupees.

This closing price valued the Indian IT exporter at approximately 463.4 billion rupees ($5.34 billion), surpassing analysts’ expectations who had anticipated a flat debut in light of a modest premium in the grey market.

Amit Jain, managing director and head of India at the U.S. private equity firm Carlyle Group (NASDAQ:CG), praised the IPO, stating, "The IPO of Hexaware is a testimony to both the quality of the asset and the depth of the Indian capital markets."

The offering saw a robust response from institutional investors, with bids for nine times the shares available, while retail investors showed tepid interest, bidding for just one-tenth of their reserved portion. This was attributed to market volatility and concerns surrounding the IT services sector.

According to Arun Kejriwal from Kejriwal Research, most large investors did not seem inclined to drive up Hexaware’s share price to immediately realize profits. Hexaware is re-entering the public market after over four years as a private entity under Baring Private Equity Asia. Carlyle, which acquired Hexaware in 2021, offloaded about a 21% stake in the company through the IPO but will maintain a majority interest, with Jain expressing optimism for further AI-driven growth.

Brokerage firm JM Financial (NSE:JMSH) initiated coverage of Hexaware stock with a "buy" rating and a price target of 820 rupees, pointing to the company’s strategy of targeting scalable clients with a comprehensive range of services. The exchange rate at the time of reporting was 86.8160 Indian rupees to the dollar.

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