Coforge-Encora deal: Will India’s largest IT acquisition reward investors?
all-stock deal will bring Advent and Warburg Pincus onto Coforge’s board, a move that could bolster its fundraising prospects. Coforge will issue shares worth $1.89 billion to Encora’s shareholders at ₹1,815 apiece, and may raise about $550 million through a qualified institutional placement or a bridge loan to retire Encora’s term debt.The deal—India’s largest ever in IT services—could lift Coforge’s FY27 revenue by 28%, according to Jefferies India.
Beyond scale, analysts point to strategic benefits, including plugging service-offering gaps in North America, particularly in the West and Midwest, and accelerating growth in emerging verticals such as healthcare and hi-tech. The deal is expected to close in four to six months.Execution and integration, as always, will be critical and are seen as re-rating triggers.
Coforge’s track record of handling mergers and acquisitions offers some comfort, even though management has yet to lay out a detailed integration roadmap for Encora. Its earlier acquisitions—SLK Global in 2021 and Cigniti in 2024, which accounted for about 9-11% and 16% of revenue at the time—were integrated smoothly and delivered margin gains.But the size and structure of the Encore deal set it apart from Coforge’s previous deals.
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