By Nandan Mandayam and Kane Wu
(Reuters) -Shares of Carlyle-backed Hexaware Technologies rose as much as 10% in their debut on Wednesday, indicating rising retail interest in India’s first billion-dollar IPO that struggled to achieve full subscription without an outsized help from large institutions.
The stock began trading at 745.50 rupees on the National Stock Exchange, above its offer price of 708 rupees. The blue-chip Nifty 50 index closed marginally lower.
At the day’s close of 762.55 rupees, the Indian IT exporter was valued at 463.4 billion rupees ($5.34 billion). Analysts had expected a flat debut against the backdrop of single-digit premium in the indicative grey market.
“The IPO of Hexaware is a testimony to both the quality of the asset and the depth of the Indian capital markets,” said Amit Jain, managing director and head of India at U.S. private equity firm Carlyle Group.
Institutional investors bid for nine times the shares on offer, while retail investors bid for only a tenth of the portion reserved for them amid market volatility and investor caution over the IT services sector.
Arun Kejriwal of Kejriwal Research said most large investors were not looking to push Hexaware’s share price and book their profit.
The IT services exporter is returning to public after more than four years when it was taken private by its former owner Baring Private Equity Asia.
Carlyle, which bought Hexaware in 2021, sold about 21% stake in the IT services exporter through the IPO. It will continue to have a controlling stake in Hexaware after the listing as it expects more AI-driven growth, Jain said.
Brokerage JM Financial began coverage of the stock with a “buy” rating and a target price of 820 rupees, citing Hexaware’s “strategy of going after scalable clients with a wider bouquet of services”.
($1 = 86.8160 Indian rupees)
(Reporting by Nandan Mandayam in Bengaluru; Editing by Arun Koyyur)
