Hexaware shares rise 5% after listing, JM Financial initiates coverage with Rs 820 target price
Hexaware Technologies climbed 4.6% to Rs 764.7 on the BSE after debuting on Dalal Street on Wednesday. The stock opened on the BSE at Rs 731 with a 3.25% premium, compared to the issue price of Rs 708, while on the National Stock Exchange (NSE), the shares debuted at Rs 745.5, marking a premium of 5.3%.
Brokerage JM Financial initiated coverage on the stock with a “buy” rating and a target price of Rs 820, which implies an upside potential of 7% from the current levels.
“We ascribe 30x PER for a 16% EPS CAGR, implying 1.8x PEG. This is at about 10% premium to midcap basket’s average PER but 25% discount to Coforge’s, making it reasonable,” the brokerage said, adding that the promoter’s likely stake sale will be an overhang, but growth acceleration could narrow the valuation gap.
The Rs 8,750 crore IPO, backed by U.S. private equity giant Carlyle, drew strong demand from Qualified Institutional Buyers (QIBs), who oversubscribed their portion by 9.09 times. However, interest from Non-Institutional Investors (NIIs) and retail investors was weaker, with subscription rates of just 20% and 11%, respectively.
Hexaware’s IPO was entirely an offer for sale (OFS), meaning all proceeds went to Carlyle, reducing its stake to 74.1% from 95% post-listing. Hexaware’s market capitalization on the BSE is currently at Rs 46,014.64 crore. The listing marks the IT services sector’s largest IPO in India, surpassing Tata Consultancy Services’ Rs 4,713-crore issue in 2004.
Stock Trading
Maximise Returns by Investing in the Right
