Following the stake-sale announcement, buying interest has propped up the share price of Pune-based Hexaware Technologies by about 10%. In an announcement made last Thursday, Baring Asia has agreed to buy 41.8% stake in Hexaware in a deal valued anywhere between Rs 1575 – 1687 crore. This will be followed by an offer at Rs 135 per share to the existing shareholders.
The stock is currently trading at Rs 127.60, up 5.7% on the BSE. It is the best performing stock among the BSE IT Index, which is up about 1.4%. The stock has been gaining since the markets opened on Monday. The BSE Sensex was up 1% and was trading at 18710.
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Analysts said that while the valuation of the deal is fully justified, investors should use the open offer opportunity to exit their holdings as the stock price is slowly inching towards its peak valuations.
“The deal values HEXW at 11x CY13 P/E. We believe the stock is fully valued and advise investors to tender shares in the open offer,” said Religare Institutional Research in a note on the company.
Analysts said that the stock of the company is unlikely to see further gains as it has already rallied on the back of the rupee depreciation, better earnings growth and improvement in demand. The fiscal year-end target for the stock has been revised from Rs 110 to Rs 135 per share by brokerage firms, in-line with the open offer price.
The IT sector stocks have been witnessing significant momentum on the back of the rupee depreciation, improving margins as well as rise in demand.
ALSO READ: Hexaware rallies on Baring PE buyout report
