The Hexaware Technologies, an India-based IT service and business process outsourcing (BPO) company)’s long anticipated IPO is finally here. They went private in 2021, courtesy Carlyle Group. Now, Hexaware plans to come public through an IPO which consists of an ₹ 8750 crore OFS. Most industry experts think that this will be among the largest technology IPOs in India. The IPO subscription is scheduled to commence from the 12th and end on the 14th. All attention on the Grey Market Premium (GMP) focusing on how high listing will bring gains. In this piece, we touch upon IPO’s valuation, GMP trends, and other subjects of IPOs widely discussed in the investing community.
Hexaware Technologies IPO update and details
Hexaware Technologies intends to issue an IPO for the price band of ₹674 to ₹708. As this is OFS, the money raised will go to the Carlyle Group, the company’s promoter looking to divest his share. Shares will likely commence trading on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on 19 February 2025.
GMP or Grey Market Premium is an unregulated way of predicting the future performance of the stock before it actually list on the exchanges.
The gap marking the difference between the selling and buying prices of the shares gives rise to this figure which is measured on a positive scale. A positive figure denotes both considerable demand while a negative figure is a cause for concern among investors.
To date, the company’s gross manifest premium lies at the price of ₹8 which translates to a nominal 1.1% premium rise over the ₹708 upper price band. This shows that in the grey market, the share price is valued at roughly ₹716. This is far lower than the previously bullish figure of ₹19 from February 07, 2023. Such numbers provide evidence that investors are not as bullish.
Every variable pertaining to the last mile delivery and blockchain technology affecting directly or indirectly the Hexaware Technologies gmp estimate gets gmp for Hexaware Technologies hanging. Now, some of these are not exhaustive:
Market Conditions In The Economy: The general condition in the market and performance of any tech company seems to determine the demand for the IPO. Reasons for weakness of investor’s enthusiasm could be due to the problems faced by the IT stocks.
Company Policies And Economics: The balance sheet of Hexaware does not contain some transformative segments of the companies core but blossom in their income bucket allows them to helps provides digital services to international clients. That is how they are termed as a fundamentally sound company.
Nonetheless, the phrase OFS implies that no new investments will take place.
Carlyle’s Exit Strategy: One way investors may view it is as the promoter selling the piecemeal shares instead of an IPO, which is OFS and not growth oriented.
Institutional Interest: In case, during anchor allotment, employed corporates get very enthusiastic, higher retail confidence comes in.
Subscription Demand: The correlation of oversubscription in the IPO from QIBs, HNIs, and retail investors with strong GMP is highly cased on strong statistical evidence.
Industry Performance: Performance of already listed companies such as TCS, Infosys, Wipro and others directly affects Hexaware IPO sentiment.
Subscription Expectations
Following the conventional wisdom of industries such as marketing, advertising, and Hexaware Technologies implies that they will receive large amounts of subscriptions owing to the nature of their products, more specifically their clients and competition in the digital transformation service space. But the doom and gloom phenomena suggest that retail investors will be pulled back. The level of final listing gains will depend decisively upon institutional demand.
… So, Should You Subscribe?
If investors are looking for a Hexaware Technologies IPO, these evaluate key points.
Pros:
Established Global IT Player: A strong position in cloud services as well as automation and business process transformation makes Hexaware stand out.
Recurring Revenue Model: The Company has multi-year contracts with several clients across the globe offering revenue visibility.
Industry Growth Prospects: There will always be demand growth with increased digital adoption as the days go by.
Potential Listing Gains: Even if minimal, there’s a potential for listing gains because the GMP stands, as of now, positive.
Cons:
OFS Structure: Since this is an OFS with no primary allotment, it means there will be no proceeds towards business expansion.
Declining GMP Trend: The drop from ₹19 to ₹8 is unsettling, demonstrating an uncertain market condition.
Overall Market Conditions: Poor market sentiment can hamper listing day performance.
Conclusion
The blatant interest from the Hexaware Technologies IPO is predominant, but HEX aware is perceived to have strong fundamentals and an extensive market presence. The declining GMP trend, however, poses a big question. How much one can risk in light of subscription demand or appetite is something which needs consideration. It is wise for long-term tech stock investors to do the highest of monitoring returns, whereas short-term investors should clearly decide before the tech stock gmp movements.
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