Baring PE to sell 27% stake in Coforge worth Rs 7,400 cr via block deals

Hong Kong-based Baring plans to invest $3 bn in India in the coming months

Baring Private Equity (PE) Asia is set to sell up to a 26.63 per cent stake, worth Rs 7,400 crore, in Coforge (formerly NIIT Technologies), through block deals on Thursday. With this sale, Baring PE will exit the company.

According to the transaction terms, the floor price has been fixed at Rs 4,550 per share — a 7.4 per cent discount to Wednesday’s closing price of Rs 4,901.95 per share.

The company holds a market valuation of Rs 30,000 crore as of Wednesday.

Coforge is a global provider of digital services and business solutions with specialised domain expertise in select industry verticals.

In April 2019, Baring PE acquired a 30 per cent shareholding in Coforge, on a fully diluted basis, from various promoter entities for Rs 1,394 per share. The aggregate consideration for the purchase of shares from these promoter entities was Rs 2,627 crore ($381 million).

Later, the PE firm launched an open offer to increase its stake to 40 per cent. In February of this year, Baring PE divested 6 million shares, totalling Rs 2,430 crore, at Rs 4,050 per share. These shares constituted 9.8 per cent of the total shares in Coforge.

Notable buyers include Nomura India Investment Fund Mother Fund, Kuwait Investment Authority, and Aditya Birla Sun Life Mutual Fund.

Baring PE has recently made two big-ticket acquisitions in India: HDFC Credila for Rs 9,065 crore with ChrysCapital, and a majority stake (60 per cent) in Indira IVF for Rs 6,000 crore. The firm plans to invest $3 billion in India in the coming months.

The company’s strategy is to provide scalability with a focus on emerging technologies.

For the financial year ended March 2023, the company reported a revenue of Rs 4,230 crore and a net profit of Rs 732 crore. On a consolidated basis, the company has reported a revenue of $1 billion.

Despite recent high-profile acquisitions by the funds, PE activities have experienced a 20.4 per cent year-on-year drop in the Asia-Pacific region during the first seven months of 2023.

In India, deal volume fell by 30.9 per cent between January and July 2023. Economic uncertainties and geopolitical undercurrents have woven a fabric of decline, with key markets such as China, India, and Japan experiencing setbacks, according to GlobalData. Several key markets suffered setbacks in deal activity.