Hexaware Technologies Limited IPO: Check IPO Date, Lot Size, Price & Details

About the company:

Established in 1992, Hexaware Technologies Limited delivers a comprehensive range of global digital and technology services, focusing on leveraging artificial intelligence. By integrating cutting-edge technology solutions, the company enables clients to innovate, adapt, and thrive in a rapidly evolving digital landscape. Hexaware operates key offshore delivery centers in India, including Chennai, Pune, Bengaluru, and Noida, along with a strategic presence in Sri Lanka. To enhance its service footprint, it plans to expand into Tier 2 cities, starting with Ahmedabad. As of September 30, 2024, the company boasts 39 delivery centers and 16 offices across major global markets, including the Americas, Europe, and the APAC region. Its services are tailored to meet the needs of six industry verticals: Financial Services, Healthcare & Insurance, Manufacturing & Consumer, Hi-Tech & Professional Services, Banking, and Travel & Transportation. The company delivers its offerings through proprietary AI-powered platforms such as RapidX for digital transformation, Tensai for automation, and Amaze for cloud adoption. Hexaware’s service portfolio includes developing ERP solutions, optimizing IT operations, leveraging AI and machine learning for data-driven insights, delivering Gen AI-powered process enhancements for personalized automation and analytics, and enabling businesses to harness cloud capabilities across service lines.

IPO Details:

The objectives of the issue:

The company will not receive any of the offer proceeds as the entire issue is an offer for sale and hence it will be received by the respective selling shareholders.

Key Strengths and Opportunities:

• Hexaware Technologies caters to six diverse industries: Financial Services, Healthcare and Insurance, Manufacturing and Consumer, Hi-Tech and Professional Services, Banking, and Travel and Transportation. The company leverages its comprehensive service portfolio and in-depth domain expertise to deliver industry-specific digital transformation strategies. By addressing the unique needs of sub-verticals within each segment, Hexaware ensures tailored solutions that maximize customer outcomes. Its ability to contextualize cutting-edge technologies has consistently fueled growth, with revenue contributions from all segments steadily increasing from FY 2021 to the nine months ending September 30, 2024.
• The company enjoys long-standing relationships with a wide array of global customers, including 31 Fortune 500 companies. In FY 2023, 62% of Hexaware’s revenue came from clients with revenues exceeding $5 billion, and nearly 83% from those above $1 billion. Its client base spans major regions, including the Americas, Europe, and APAC, with significant contributions from the Middle East, Africa, and Latin America. For the nine months ending September 30, 2024, the Americas accounted for approximately 73% of total revenues, followed by Europe at 20%, underscoring a well-diversified geographical presence.
• Hexaware continuously enhances its platforms and service offerings to expand its capabilities and market reach. The company invests in emerging technologies such as product engineering, cybersecurity, data analytics, and adjacent solutions. With a dedicated team focused on building deeper client engagements, it identifies growth opportunities within its existing customer base. The company also aims to expand its global footprint by strengthening its presence in Canada, continental Europe, the Middle East, and Australia, ensuring a competitive edge across its core markets in the U.S. and the U.K.

Risks:

• Hexaware’s revenue is heavily reliant on its operations in the Americas and Europe, contributing 73.4% and 20.5% of revenue, respectively, for the nine months ending September 30, 2024. Any economic downturn, political instability, or market-specific disruptions in these regions could adversely impact the company’s financial performance. The concentration risk makes Hexaware more vulnerable to localized economic fluctuations, limiting its ability to mitigate potential regional challenges.
• For the nine months ending September 30, 2024, 28.3% and 21.2% of revenue came from the Financial Services and Healthcare & Insurance segments, respectively. Any unfavorable developments in these industries, such as regulatory changes, economic slowdowns, or shifts in market demands, could significantly affect the company’s revenue streams, profitability, and business operations.
• The company’s success is tied to its ability to attract, retain, and train highly skilled professionals. Competition for top talent in the technology sector remains intense. Any difficulty in maintaining an adequately skilled workforce could hinder Hexaware’s capacity to deliver quality services, innovate, and expand, negatively impacting its operational performance and profitability.
• Hexaware’s business growth is influenced by the outsourcing strategies of its clients. A reduction in outsourcing budgets or strategic decisions by existing and potential customers to reduce IT service engagements could affect the company’s pricing, work volume, and overall revenue. This dependency poses a significant risk to its long-term growth trajectory.

Financial Snapshot:

Conclusion:

Hexaware Technologies Limited is one of the leading players in AI-enabled digital solutions provider from India. It marked steady growth in its top and bottom lines for the reported periods. However, the listed peers have reported better margins. Hexaware comes at an earnings valuation of 43x based on its earnings per share (EPS) as of December 31, 2023, and the upper price band. In comparison, its listed peers, such as Persistent Systems, Coforge, LTIMindtree, and Mphasis, exhibit PE ratios of 69x, 72x, 37x, and 32x respectively as of February 11, 2025. Considering the financials, valuation, and current market condition, we advise the investors to AVOID Hexaware Technologies Limited IPO.