Hexaware stock jumps by 20% as the company considers delisting at ₹285 per share

• Once the official delisting proposal is made, minority shareholders will have to approve the proposal.
• Hexaware has proposed to delist the company at ₹285 per share, which is a premium of 10% over the closing price as on June 4.
• There should be at least twice the number of minority shareholders in favour of delisting at the given price.
• The promoters of Hexaware own 62.44%, while the rest is owned by mutual funds, foreign institutional investors and retail investors.

The Hexaware stock hit the upper circuit on the stock exchanges in the Friday morning trade (June 5), locking at ₹311.30 after a delisting proposal was made by the company's promoters. The share remained locked at the upper circuit of 20% even as the company proposed to delist shares at ₹285 per share, which is a 10% premium over the closing price as on June 4.

"HT Global IT Solutions Holdings, the promoter of the company has expressed its intention to acquire all fully paid up equity shares of the company that are held by the public shareholders of the Company," Hexaware said in an exchange filing.


The promoters of Hexaware own 62.44%, while the rest is owned by mutual funds, foreign institutional investors and retail investors.

"The promoter considers a price of Rs 285 per equity share (Indicative Offer Price) as a price at which the promoter / promoter group will be willing to accept equity shares in the delisting proposal," the company further added.


What are the analysts saying?

Analyst houses are either neutral or bullish on the Hexaware stock.

HDFC Securities has maintained its ‘Buy’ rating on the stock with a target price of ₹300, which it has crossed in the first hour of trading today. The research house says that Hexaware’s higher profit after tax (PAT), strong sales and lower client risk puts Hexaware in a strong position.

Emkay Research, on the other hand, has maintained its ‘Hold’ rating with a target price of ₹300. It credited Hexaware’s net profit gains to improved forex performance in Q4 2020.

Brokerage	Target price	Rating
HDFC Securities	₹300	Buy
ICICI Securities	₹315	Hold
Emkay Research	₹270	Hold
Centrum Research	₹340	Buy

What happens next?

Now, Hexaware’s minority shareholders will have to approve the delisting proposal through ballot once it is out. There should be at least twice as many minority shareholders in favour of the proposal.

Who holds how much of Hexaware stock?

Mutual funds, foreign institutional investors and retail investors own 37.56% of the stake in the company. However, given the 20% jump in the Hexaware share price today, it is likely that the company will be able to easily convince the minority shareholders.

Mutual Fund	Stake in Hexaware
HDFC Mid-cap Opportunities Fund	4.94%
HDFC Hybrid Equity Fund	1.45%
SBI Magnum Midcap Fund	1.17%
Franklin India Prima Fund	0.79%

Source: BSE, Kotak Securities

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