Coforge, formerly known as NIIT Technologies, witnessed a decline of 7% in its shares during trading, following the company’s announcement of raising funds to the tune of ₹3,200 crore.
The decision was approved during the board meeting held on Saturday, March 16, as per an exchange filing by the company. The funds will be raised through a Qualified Institutional Placement (QIP), involving the issuance of shares to eligible institutional shareholders. However, specific details regarding the QIP, including dates and pricing, are yet to be finalized.
As of 11:03 am, Coforge shares were trading 6.60% lower at ₹5,712.65.
For investors, it might not be a positive discovery that Coforge did go ahead and raise funds. But is this perceived as negative for the stock’s fundamentals by financial analysts?
While investors often focus on the utilization of funds, stock experts view the quantum of fund-raising as a negative surprise. Despite this, they suggest that the fund raise is likely to be EPS accretive, even in the scenario of acquiring a lower-margin company. Coforge has a strong track record of execution on acquisitions, and experts do not perceive this move as negative for the stock’s fundamentals.
