Information Technology firm Coforge’s shares plunged by 6.86% to ₹ 4,037.00 apiece on Monday after nearly 60 lakh shares, equivalent to 9.8% equity changed hands via a block deal.
The buyers and sellers of the deal are not known yet, however, some reports indicate that Hong Kong-based private equity firm Barings PE is likely the seller in the deal. According to the reports, the shares changed hands at an average of ₹ 4050 apiece in the pre-open trade on Monday, taking the transaction value to ₹ 2460 crores.
The reports added that the private equity firm is looking to sell shares worth ₹ 1200 crores with a greenshoe option. This option allows it to sell additional shares if there is high demand.
This is not the first time that Barings PE has sought to sell its stake in Coforge. The firm had partially exited the company in March 2022, selling 60 lakh shares for proceeds of ₹ 2560.32 crores. Experts say that the recent stake sale is the private equity firm’s strategy to divest its holdings in mature companies and invest in new and emerging opportunities.
In another development, Coforge announced its partnership with data integration, management and delivery platform, Denodo. This partnership will allow banks and other financial organisations to engage in agile modernisation projects without affecting daily operations.
Under this partnership, Denodo will bring its logical data integration and data management approach, powered by data virtualization, while, Coforge will bring its design and implementation expertise to BFSI clients. This will enable companies to overcome challenges like security, compliance, systemic risks, downtime, and data migration quality, so they can gain the necessary agility to engage in migration or modernization projects in response to diverse business needs.
Coforge’s shares were trading at ₹ 4073.30 apiece down 6.02% at 12:42 PM. It is a mid-cap company with a market capitalization of ₹ 26,470 crores. It has a return on equity of 25.45%, and an ideal debt-to-equity ratio of 0.27. Its shares were trading at a price-to-earnings ratio of 34.27, which is higher than the industry average of 24.71, indicating that the stock might be overvalued as compared to its peers.
Written by Simran Bafna
