Hexaware Technologies Ltd, primarily owned by Carlyle Group, has submitted updated documents to initiate an ₹8,750 crore IPO, a reduction from the previously announced ₹9,950 crore IPO in September. Carlyle’s subsidiary, CA Magnum Holdings, is set to gain at least 1.5 times its investment as Hexaware prepares to re-enter the public market next week. CA Magnum plans to sell nearly a 20% stake in the company, which has established a price range of ₹674 to ₹708 for the IPO. The offering will consist solely of an offer-for-sale, meaning Hexaware will not raise new capital, and all proceeds will go directly to Carlyle’s subsidiary. Carlyle currently holds a 95.03% stake in Hexaware, equating to 577,604,202 shares, according to the red herring prospectus. At the upper end of the price band, Carlyle stands to gain 1.8 times its investment, having acquired shares at an average price of ₹385.35, with each share having a face value of ₹1. The subscription period for the IPO is set from 12 February to 14 February, with the listing on BSE and NSE anticipated on 19 February. This marks Hexaware’s second public offering, having previously delisted in 2020. A year later, Carlyle acquired a 95.51% stake in Hexaware for approximately $3 billion from Baring Private Equity Asia, which had taken a majority stake in 2013. Hexaware has engaged several financial institutions, including Kotak Mahindra Capital, Citigroup, JP Morgan, HSBC, and IIFL Securities, to assist with the share issuance.
In response to a slowdown in revenue from its primary markets in the US and Europe, Hexaware’s CEO Srikrishna Ramakarthikeyan indicated that the company is focusing on enhancing its business in the Asia-Pacific region. Currently, around 71% of Hexaware’s revenue is generated from the US, with approximately 20% from Europe and the remainder from Asia-Pacific. Despite the challenges in its main markets, Hexaware reported an increase in total income to ₹10,389.1 crore ($1.25 billion) for the financial year ending December 2023, up from ₹9,378.8 crore the previous year. Profit also rose to ₹997.6 crore, compared to ₹884.2 crore in the prior year.
