Hexaware Tech IPO Listing: Stock lists at 5% premium over IPO price

Hexaware Tech IPO Listing

Hexaware Tech IPO Listing: A Strong Debut with a 5% Premium Brings Joy to Retail Investors

Hexaware Technologies, a leading global provider of IT and AI services, made its long-awaited debut on the Indian stock markets today following its ₹8,750 crore Initial Public Offering (IPO), which was open for subscription from February 12 to 14, 2025.

The listing of the company’s shares has been met with a positive reception from retail investors, who saw their investments grow by 5% on the first day of trading.

Hexaware’s IPO offered a price band of ₹708 per share, and on its first day of trading, the shares listed at a notable premium, with the price rising to ₹731 on the Bombay Stock Exchange (BSE) and ₹745.50 on the National Stock Exchange (NSE), offering IPO investors an immediate listing gain of around 5%.

As the trading day progressed, the stock price continued to rise, peaking at ₹788 before closing at ₹755.75 on the NSE, marking an impressive 6.74% gain by the end of the day.

This solid performance provided immediate profits to those who subscribed to the IPO, particularly benefiting retail investors and employees who were offered shares at a discounted rate.

While the listing itself was successful, the overall response to the IPO was mixed, with significant differences in demand across various investor categories.

The IPO was oversubscribed by 2.79 times, but certain segments, such as Qualified Institutional Buyers (QIBs), showed much higher demand compared to non-institutional and retail investors.

Despite the varying demand, the IPO still managed to generate substantial interest, particularly in the institutional and employee segments.

Hexaware Tech IPO: Subscription Details

The ₹8,750 crore IPO was launched with 12,35,87,570 shares available for sale, each with a face value of ₹10.

These shares were offered through an Offer for Sale (OFS) route, meaning that no new shares were issued, and existing stakeholders, including promoters and other investors, were selling their holdings in the company.

The subscription results indicated a clear disparity in demand among investor groups. The overall subscription was 2.79 times, meaning the total number of shares offered was oversubscribed by this multiple.

However, the Qualified Institutional Buyers (QIB) category was by far the strongest, with subscriptions oversubscribed by 9.55 times, reflecting robust interest from institutional investors.

This strong demand from QIBs, which typically includes mutual funds, pension funds, and other large investors, helped build confidence in the listing.

On the other hand, demand from retail investors was less enthusiastic. The retail portion of the offering was undersubscribed, with only 0.11 times the shares offered to this group being filled.

Similarly, the Non-Institutional Investors (NII) segment saw even weaker demand, with only 0.21 times of their allocated portion subscribed.

Even the employee portion, which often sees preferential interest, was not fully filled, with only 0.33 times the shares allotted to employees being subscribed.

While these lower subscription figures for retail and non-institutional investors may seem concerning, the positive listing performance and the 5% premium at debut have been viewed as a reassuring sign for those who invested in the IPO.

Retail investors, who were allotted shares at ₹708 each, were able to sell them at ₹755.75 at market close, providing them with a profitable return on their investments within the first few hours of trading.

The Allure of Hexaware Tech: Why the IPO Sparked Mixed Reactions

Hexaware Technologies, founded in 1992, has evolved into a major player in the IT and artificial intelligence (AI) services sector, offering a wide range of solutions to clients across various industries, including banking, healthcare, and retail.

The company is known for providing cutting-edge AI and machine learning services, helping businesses automate processes and improve efficiency.

Hexaware operates key offshore delivery centers in major Indian cities such as Chennai, Pune, Bangalore, and Noida, with additional offices in Sri Lanka.

One of the driving factors behind Hexaware’s strong market position is its focus on AI and automation services, which have become increasingly essential to businesses seeking to remain competitive in a fast-evolving technological landscape.

The company also has a strong track record of providing digital transformation solutions, which has resonated well with large institutional investors, contributing to the strong demand in the QIB portion of the IPO.

Despite these strengths, the IPO faced challenges in attracting broader interest, particularly from retail and non-institutional investors.

This can be attributed to a variety of factors, including market conditions, investor sentiment, and the overall appetite for tech-related IPOs.

While the AI and automation sectors have seen significant growth, some investors may have been cautious about the pricing of the IPO, especially given the fluctuating nature of tech stocks in recent months.

Moreover, some retail investors may have found the ₹708 share price to be on the higher end of the spectrum for a company that, while established, is still relatively small compared to some of the larger tech players in India.

Employee Benefits: A Key Advantage

Employees of Hexaware Technologies were given an additional advantage in the form of discounted shares, with each share offered at a price of ₹67 lower than the IPO price of ₹708.

This provided employees with a unique opportunity to participate in the IPO at a much lower entry cost, ensuring they would benefit more significantly from the listing gains.

The discounted price likely contributed to the higher subscription rate in the employee segment, though it still fell short of being fully subscribed.

Looking Ahead: Future Prospects for Hexaware Tech

Hexaware’s listing marks a significant milestone in the company’s growth, and its debut performance on the stock market is seen as a positive step for the company’s future prospects.

With a strong foundation in AI, automation, and digital transformation services, Hexaware is well-positioned to capitalize on the growing demand for these technologies across industries globally.

Additionally, the company is actively expanding its footprint in Tier-2 cities in India, with plans to establish new centers in Ahmedabad.

This move is likely to help Hexaware tap into a broader talent pool and continue its growth in the domestic market.

As of September 2024, Hexaware has a global delivery presence, with 39 centers and 16 offices across North America, Europe, and the Asia-Pacific region, indicating a strong international footprint.

This global presence, coupled with its strategic focus on AI and automation, positions Hexaware well to compete in the increasingly competitive global tech services market.

Despite the mixed response to its IPO, the positive listing gains suggest that there is investor confidence in the company’s long-term growth potential.

Moving forward, Hexaware will likely focus on building its brand, expanding its service offerings, and leveraging its technological expertise to attract more clients and investors.

Final Remarks

The listing of Hexaware Tech on the Indian stock exchanges has been a success, with a 5% premium offering an immediate gain to IPO investors.

While the response to the IPO was mixed, the strong listing performance and the positive market sentiment reflect investor confidence in the company’s future.

With a focus on AI, automation, and digital transformation, Hexaware Tech looks poised to build on its solid foundation and continue to grow in the competitive global tech industry.

For retail investors, the IPO has proven to be a profitable venture, providing early returns, and for employees, the discounted shares have provided an added benefit, making this listing one to remember.