Hexaware Technologies IPO: Should you subscribe? Here is what analysts say

The initial public offering (IPO) of Hexaware Technologies Ltd (HTL), a global digital and technology services provider, opened on Wednesday, February 12, 2025, and will conclude on Friday, February 14, 2025. The Rs 8,750-crore public issue is the largest IPO in the country’s IT sector so far, surpassing Tata Consultancy Services’ in 2004. HTL has fixed the price band between Rs 674 and Rs 708, which is reasonable compared to its peers, say most analysts.

The company is making a comeback to the country’s capital market after its delisting in 2020.

Should you subscribe to Hexaware Tech IPO?

While most analysts have recommended subscribing to the issue, some have a ‘neutral’ stance. 

SBI Securities analysts have advised investors to subscribe to it at cut-off price with a long-term perspective. According to them, it is relatively cheaper than its peers based on its upper price band (Rs 708). “It has a healthy cash balance of Rs 1,346 crore as of September 2024,” analysts at the brokerage wrote in a research report.

Bajaj Broking suggests subscribing to the issue from a long-term perspective. HTL has outperformed most of its peers and is confident of maintaining the trends going forward, according to Bajaj Broking analysts.

However, the issue appears to be relatively fully priced, according to the brokerage. 

Anand Rathi analysts also find the issue to be fairly priced.

While Ventura Securities analysts do not have any rating on the IPO, they find HTL’s valuation to be “moderate” and “fully valued” compared to other companies like Persistent Systems and Coforge.

KRChoksey has a ‘neutral’ stance on the HTL IPO, citing risks such as macroeconomic uncertainties and sectoral competition.

Hexaware Technologies Bidding Update

On the first-day of the three-session bidding process, the HTL IPO received a subscription of 3 per cent till 4:48 pm, according to provisional exchange data.

Hexaware Technologies IPO Key Dates

The HTL stock is likely to debut in the secondary market tentatively on Wednesday, February 19.

Peer Financials 

Here is a summary of the financials of some of HTL’s main peers in the IT sector:

Particulars (Rs cr)	HTL	Persistent Systems	Coforge	LTIMindtree	Mphasis
CMP	708	6228.6	8521.4	5944.9	2825.7
Sales	10380.3	9822	9179	35517	13932
EBITDA	1581.1	1676	1428	6387	2422
Net Profit	997.6	1093	836	4585	1555
Mkt Cap.	43024.8	96543.3	57007.8	175967.6	53687.4
Enterprise Value	42520.9	95727.3	57109.8	173192.6	54417.4
EBITDA Margin (%)	15.2	17.1	15.6	18	17.4
Net Margin (%)	9.6	11.1	9.1	12.9	11.2
PE (x)	43.1	88.3	68.2	38.4	34.5
EV/EBITDA (x)	26.4	57.1	40	27.1	22.5
RoE (%)	22.8	24	24.1	25	18.4
RoCE (%)	29.6	29.2	28.6	31.2	24
EV/Sales (x)	4	9.7	6.2	4.9	3.9
P/S (x)	4.1	9.8	6.2	5	3.9

Hexaware Technologies IPO: Registrar & BRLMs

The official registrar for the HTL IPO is KFin Technologies Ltd, and the book-running lead managers are Kotak Mahindra Capital, Citigroup Global Markets India, JP Morgan India, HSBC Securities & Capital Market, and IIFL Capital Services.

Hexaware Technologies Company Profile

Hexaware Technologies is a global IT company focused on Artificial Intelligence (AI). It helps businesses with digital transformation, AI-driven solutions, and cloud services. The company operates in six key industries, including banking, healthcare, and manufacturing, and offers services like software development, cybersecurity, and data analytics. Hexaware uses AI-powered platforms like RapidX, Tensai, and Amaze to support clients worldwide. 

Previously HTL was owned by Baring Private Equity Asia and delisted in 2020. After that Carlyle Group took over its stake in October 2021.