Shares of Indian IT firm Coforge slipped in early trade on Friday as investors monitored reports of a potential $1 billion acquisition and an upcoming fundraising decision. The stock opened lower on the National Stock Exchange, trading around Rs 1,724.3, down 0.77 percent. Over the past five trading sessions, Coforge shares have fallen about 6.5 percent, underperforming some mid-tier IT peers amid investor caution regarding possible equity dilution from fresh capital raising.
Reports suggest Coforge is in advanced discussions to acquire US-based digital engineering company Encora, a firm backed by private equity investor Advent International. Though neither company has confirmed the deal, sources indicate the proposed transaction could be valued at over $1 billion. If completed, the acquisition is expected to strengthen Coforge’s presence in cloud, data, and product engineering, while expanding its footprint in key international markets, particularly in the US.
Alongside the potential acquisition, Coforge has scheduled a board meeting on December 26 to consider a fundraising proposal. While the company has not explicitly tied the capital raising to the Encora deal, analysts note that a fresh infusion of funds could provide financial flexibility for strategic acquisitions. Investors are drawing parallels to a similar move in 2023, when Coforge raised Rs 2,240 crore through a Qualified Institutional Placement (QIP) to fund its purchase of Cigniti Technologies.
Despite short-term market jitters, Coforge’s fundamentals remain robust. The company has been among the faster-growing mid-tier IT firms in India, with consistent revenue growth and a focus on expanding key verticals such as banking, insurance, and travel. Analysts suggest that the stock’s near-term performance will likely hinge on updates regarding the Encora deal and the board’s fundraising decision.
Market watchers are also keeping an eye on broader IT sector trends and investor sentiment, noting that while acquisitions often bring long-term growth potential, they can also lead to temporary volatility in share prices. For Coforge, the next few days could prove pivotal in shaping both investor confidence and stock performance.
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