By Nandan Mandayam

Feb 14 (Reuters) - Indian IT exporter Hexaware Technologies' HEXW.NS $1 billion initial public offering was fully subscribed in the final hours of the share sale on Friday, driven largely by institutional buyers as others held back amid a broader market slide.

The company is targeting a valuation of 430 billion rupees ($4.96 billion) at the upper end of its price band of 674-708 rupees in India's biggest IPO so far this year.

Top shareholder Carlyle CG.O is selling about 21% of its stake in the company, which is issuing no new shares in the IPO.

The IPO comes at a time when India's blue-chip Nifty 50 index .NSEI has fallen 3% so far this year and slid about 12.5% from its all-time closing high in September, amid concerns over a corporate earnings slowdown, fewer U.S. rate cuts, sustained foreign selling, and worries about U.S. tariffs.

"The overall market sentiment does not appear to favour richly-priced IPOs at this time," said Narendra Solanki, head of research at Anand Rathi.

Hexaware's IPO was subscribed some 2.7 times, led by demand from qualified institutional buyers such as foreign investors and mutual funds, who bid for 9 times the shares on offer.

However, retail investors, for whom Hexaware had reserved nearly 45 million shares, bid for just 11% of the shares on offer. Non institutional investors bid for only a fifth of their portion.

"Investors looking for short-term gains through the IPO are staying away from Hexaware," said Arun Kejriwal, founder of Kejriwal Research.

The absence of a "listing pop" in the so-called indicative grey market premium, which is in single digits, is keeping investors away, he added.

After a record year for IPOs in 2024, public floats have offered investors scant returns this year, with 60% of the companies that have listed on the BSE bourse trading at a discount to their IPO price, stock exchange data showed.

Hexaware's stock is expected to be listed on February 19.

The company was a publicly listed firm until late 2020, when its former controlling shareholder Baring Private Equity Asia (BPEA) took it private. Carlyle acquired a majority stake in the company in 2021.

($1 = 86.7170 Indian rupees)

(Reporting by Nandan Mandayam in Bengaluru; Editing by Shinjini Ganguli)

((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))