BPEA generates $333m through Coforge partial exit

The GP sold 6m shares across two tranches, priced at INR 4,261 per share and INR 4,273 per share, respectively, according to bulk trading data released by BSE. It retains approximately 24.4m shares, or 40.3% of Coforge, valued at INR 130.6bn, based on the March 11 closing price of INR 4,296.80.

BPEA bought a 30% interest in Coforge – then known as NIIT Technologies – in 2019 for INR 26.3bn, taking out the promoter, management training services provider NIIT. It then made an open offer for an additional 26%, taking the total investment to INR 49bn. By the end of the year, the private equity firm had committed around INR 61bn and accumulated a more than 70% position.

Since then, Coforge’s stock price has increased more than 160%, largely consistent with gains in the broader IT services space as corporates responded to COVID-19 by increasing their technology spend and investing in work-from-home platforms. Nevertheless, Coforge acted quickly to diversify a customer base heavily populated by clients in pandemic-afflicted sectors.

“About 30% of the client base was in travel, tourism, and hospitality, and the rest was insurance, financial services, and a few other generic areas. They landed a large client during the downtown, so the financial services business grew 30-40% while travel contracted by 10%,” Jimmy Mahtani, a managing director at BPEA, told AVCJ at the end of last year.

The private equity firm started exiting its position in late 2020, selling INR 2.01bn in shares. A further two transactions in May 2021 netted approximately INR 16.2bn, bulk trading data show. By year-end, it held 30.4m shares, suggesting additional sales.

Coforge is a global digital services and solutions provider that enables the outsourcing and transformation of traditional business operations. Its competencies cover product engineering, digital integration and process automation, artificial intelligence-enabled big data analysis, and cloud and infrastructure management services.

Revenue came to INR 24.1bn for the 12 months ended March 2021, up from INR 22.3bn a year earlier. Over the same period, net profit fell from INR 4.2bn to INR 2.4bn.

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• Topics
• South Asia
• Open market
• Support services
• India
• Baring Private Equity Asia
• IT services