IPO Value: Rs674-708
IPO Dimension: Upto Rs8,750 crore
Implied Market Cap: Upto Rs43,025 crore
Face Worth: Re1
Lot Dimension: 21 shares
Retail Portion: 35%
Hexaware Applied sciences, a mid-tier IT providers exporter, plans to boost Rs 8,750 crore by means of a proposal on the market by the promoter Carlyle group. The promoter’s stake will fall to 75% after the IPO from 95%. The corporate caters to the marquee international purchasers within the main verticals of banking and finance, capital markets, healthcare and insurance coverage. It has reported double-digit development in income and revenue over the previous two years. The IPO is priced decrease in contrast with among the mid-tier friends. Given these components, long run traders might contemplate the IPO.
Enterprise
Hexaware was delisted from inventory exchanges in November 2020. In 2021, Carlyle acquired it from ETQ (earlier Baring Personal Fairness Asia) for round $ 3 billion by means of an funding holding firm CA Magnum Holdings. Hexaware focuses on capital markets, healthcare, and insurance coverage verticals, which collectively contribute almost half to the income whereas one-third of it’s from manufacturing, client, hi-tech {and professional} providers segments. It earns over 72% income from Americas, 22% from Europe and remaining from Asia Pacific. Offshore providers contribute over 43% to income whereas the remaining is from onshore actions. High 10 purchasers contributed over 35% to income in contrast with round 30% and 40% for Coforge and Persistence Methods. It had 32,536 workers on the finish of September 2024. The worker attrition fee was 11.3%, lowest amongst friends. The corporate has designed proprietary AI platforms throughout digital transformation, automation and cloud adoption.
Financials
The corporate follows the calendar yr as its fiscal yr. Income elevated by 20.3% yearly to Rs10,380.3 crore and internet revenue rose by 15.4% to Rs997.6 crore between FY21 and FY23. The working margin earlier than depreciation and amortisation (EBITDA margin) remained at 15-16% over the interval, much like friends. Within the 9 months to September 2024, Hexaware’s income grew by 13.6% year-on-year to Rs 8,820 crore whereas internet revenue grew by 6% Rs853.3 crore. The corporate is debt free. It has paid over 50% of internet revenue as dividends over the previous few years.
Valuation
Contemplating the annualised internet revenue for the 9 months to September 2024, Hexaware calls for a ahead price-earnings (P/E) a number of of round 38. Coforge and Persistent commerce at P/Es of round 66 and 69 respectively.
