Hexaware Technologies Files for ₹9,950 Crore IPO, Marking Significant IT Sector Listing
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Hexaware IPO listing: A second coming | Mint
Hexaware operates five service lines, including cloud services, data, and artificial intelligence, its draft red herring prospectus showed. The company has rebranded its service lines and reduced them from six as stated in its annual report. Four of the service lines cater to clients in the IT services business, through which it gets about 85% of its revenue. The remaining service line is for its business process outsourcing clients, which fetch the company about 13% of its revenue.
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Hexaware files DRHP for Rs 9,950-crore IPO
Hexaware Technologies has filed a draft red herring prospectus with SEBI to raise ₹9,950 crore through an IPO. The offering will be an offer for sale from CA Magnum Holdings, affiliated with Carlyle Group. Hexaware, delisted in 2020, reported a profit of ₹997.6 crore in 2023, with revenue growing by 12.8% to ₹10,380.3 crore.City-based Hexaware Technologies has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise ₹9,950 crore through an initial public offering (IPO). The IPO will entirely be an offer for sale from CA Magnum Holdings, an affiliate of private equity firm Carlyle Group. Hexaware is a global digital and technology services company with artificial intelligence (AI) at its core. It offers five broad services - design & build, secure & run, data & AI, optimise, and cloud services. Hexaware was delisted from the Indian bourses in 2020. The company reported a profit after tax of ₹997.6 crore for the year ended December 31, 2023, compared to a profit of ₹884.2 crore a year ago. Revenue from operations grew by 12.8% in CY23 to ₹10,380.3 crore, from ₹9,199.6 crore in CY22. Kotak Mahindra Capital, Citigroup Global Markets India, JPMorgan India, HSBC Securities and Capital Markets (India) and IIFL Securities are the book-running lead managers for the issue.
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Hexaware Technologies, backed by Carlyle, has filed for a ₹9,950 crore IPO, potentially becoming the largest IT services company to list in India in 14 years. The move signals a revival in the tech IPO market.
Hexaware's IPO Filing: A Milestone for Indian IT Sector
Hexaware Technologies, a prominent IT services company, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO) worth ₹9,950 crore ($1.2 billion)
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. This move marks a significant milestone as it could potentially become the largest listing by an IT services company in India in the past 14 years2
.Ownership and Offer Details
The IPO is structured as an offer for sale (OFS) by the company's promoters and investors. CA Magnum Holdings, a Carlyle entity, plans to sell up to 153.7 million shares, while Hexaware Technologies Limited will offer up to 13.7 million shares
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. This structure indicates a strategic move by existing shareholders to capitalize on the company's growth and market position.Market Impact and Timing
The timing of Hexaware's IPO is noteworthy, coming after a period of subdued activity in the tech IPO market. It signals a potential revival of investor interest in the IT services sector. The last major IT services company to go public in India was Intellect Design Arena in 2014, which was formed after a demerger from Polaris Financial Technology
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.Company Background and Financial Performance
Hexaware Technologies, founded in 1990, has established itself as a key player in the IT services industry. The company reported a revenue of ₹11,974.1 crore for the fiscal year 2023, with a profit after tax of ₹1,252.7 crore
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. These figures underscore the company's strong financial position and growth trajectory.Strategic Implications
The IPO is expected to provide Hexaware with increased visibility and access to capital markets. It also represents a significant exit opportunity for Carlyle, which acquired Hexaware in a $3 billion deal in 2021
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. The listing could potentially value Hexaware at around $4 billion, reflecting the company's growth since the acquisition.Related Stories
Market Sentiment and Future Outlook
The success of Hexaware's IPO could have broader implications for the Indian IT sector and the IPO market as a whole. It may encourage other tech companies to consider public listings, potentially leading to a resurgence in tech IPOs. The market's reception to this offering will be closely watched by industry observers and potential issuers alike.
Regulatory Process and Timeline
With the DRHP filed, Hexaware will now await SEBI's approval before proceeding with the IPO. The exact timeline for the listing will depend on regulatory clearances and market conditions. However, the filing itself is a clear indication of the company's readiness to enter the public market
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