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Centrum Broking Report
Hexaware Technologies Ltd. promoter group has started the delisting through reverse book building process.
The process starts on September 09, 2020 (bid open date) and ends on September 29, 2020 (bid close and payment to shareholders).
The promoter group (Barings) currently owns 62.08% stake and has made an offer to buy the remaining 37.92% stake from shareholders.
The delisting would be successful if Barings stake post the process reaches 90% stake in the company.
We note all the midcap Information Technology companies are delivering strong performance in the recent period.
Also select midcap IT stocks have low free float (Larsen and Toubro Infotech Ltd., Mindtree Ltd, NIIT Technologies Ltd., Larsen and Toubro Technology Services Ltd. etc) and hence funds have huge impact cost to build a sizeable position in these stocks.
Hexaware delisting process is coming at this juncture and hence exiting investors could have difficulty in redeploying the amount raised from their stake sale.
Hence, the bid price from existing large institutional investors might be a tad high.
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