Coforge Declines Amid Promoter Stake Sale Buzz

Shares of Coforge Ltd. declined as much as 7.71% on Monday amid a report of a likely promoter stake sale.

The company, formerly known as NIIT Technologies, had about six million shares change hands on the NSE, according to data compiled by Bloomberg. The trading volume was 18 times the three-month full-day average.

On Sunday, the Business Standard newspaper that Baring Private Equity may sell part of its 40% equity stake in Coforge via block deals.

The private equity firm has hired financial services provider IIFL Finance Ltd. to seek investor interest in the company and has offered up to 7% discount to the Friday closing market price of Rs 4,348 per share, the report said, citing banking sources. The shares offered are worth Rs 1,300 crore, with a greenshoe option of equivalent value, taking the total deal size to Rs 2,600 crore.

As on Dec. 31, 2022, Hulst BV—a unit of Baring PE—had a 39.99% stake in Coforge.

In April 2019, funds affiliated with Baring Private Equity Asia 18.85 million Coforge shares—equivalent to 30% shareholding on a fully diluted basis—from promoter entities at Rs 1,394 apiece, aggregating to Rs 2,627 crore. That triggered an open offer to purchase 26% additional shareholding, in a deal valued at Rs 4,890 crore.

In March 2021, Hulst BV held 63.99% stake in the IT firm.

Since then, the promoter has offloaded stock in multiple bunched trades, including a U.S. listing of Coforge via the ADR route, to pare its stake to 40% at the end of last year.