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Hexaware Technologies, supported by Carlyle Group (NASDAQ:CG), witnessed its shares jump by as much as 10% during their market debut, Reuters reported.
This surge reflects growing retail interest in what is India’s first billion-dollar Initial Public Offering (IPO) of the year, which initially faced challenges in achieving full subscription without significant backing from large institutional investors.
The stock opened on the National Stock Exchange at 745.50 rupees, higher than its offering price of 708 rupees. Despite a marginal decline in the blue-chip Nifty 50 index on the same day, Hexaware’s shares closed at 762.55 rupees, giving the Indian IT exporter a market valuation of 463.4 billion rupees ($5.34 billion).
The performance exceeded analysts’ expectations, who had predicted a more subdued start given the modest premium indicated in the grey market.
Amit Jain, managing director and head of India at Carlyle Group, remarked on the successful listing, highlighting the strength of Hexaware as an asset and the robustness of the Indian capital market. The IPO attracted substantial interest from institutional investors, with bids for nine times the shares available, contrasting with the tepid response from retail investors, who bid for merely one-tenth of their reserved portion. This discrepancy is attributed to the current market volatility and a cautious outlook towards the IT services sector.
Arun Kejriwal from Kejriwal Research noted that the majority of large investors were not in a rush to elevate Hexaware’s share price for immediate gains. The IT services firm is making a comeback to the public market after over four years of private ownership by Baring Private Equity Asia.
Carlyle, which acquired Hexaware in 2021, offloaded approximately 21% of its stake in the company through this IPO. Despite the sale, Carlyle will maintain a controlling interest in Hexaware, with Jain expressing confidence in the company’s potential for AI-driven expansion.
Brokerage firm JM Financial (NSE:JMSH) initiated coverage of Hexaware stock with a "buy" rating, setting a target price of 820 rupees. Their optimistic outlook is based on Hexaware’s strategic approach of targeting scalable clients and offering a more comprehensive range of services.
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