Persistent Systems shares came under heavy selling pressure on Monday after the company announced its proposed acquisition of German IT services firm Nagarro. The stock fell nearly 8% during the session, making it one of the biggest losers among mid-cap IT stocks as investors reacted cautiously to the size and valuation of the deal.
The acquisition, valued at around €1.35 billion, is expected to expand Persistent Systems’ global footprint and strengthen its capabilities in digital engineering, artificial intelligence and enterprise technology services. But the announcement also raised concerns among investors about the price being paid and the difficulty of integrating a company of Nagarro’s scale.
Brokerages were divided in their first reaction. While some analysts said the deal could offer strategic benefits over time, many described it as expensive. They pointed out that Persistent is paying a premium for Nagarro, which has led to questions about how quickly the acquisition can generate meaningful returns.
Market participants also flagged the funding structure and its possible impact on the company’s financial performance. Analysts said the transaction could weigh on earnings in the near term because of higher borrowing costs, integration expenses and execution risks linked to combining two large technology businesses.
Despite the weak market response, Persistent Systems said the acquisition would strengthen its position in key global markets and broaden its service portfolio. The company believes the combined business will have greater scale, access to new clients and stronger capabilities in fast-growing technology segments.
The acquisition comes at a time when Indian IT companies are trying to expand internationally even as global technology spending remains uneven. Persistent’s management remains confident that the deal will support future growth and improve its competitive position.
Investors are now expected to watch regulatory approvals, financing plans and integration progress closely before reassessing the company’s long-term outlook.
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