BPEA EQT exits India's Coforge via $924m block trade
BPEA EQT has sold its remaining 26.6% stake in India-listed IT provider Coforge, realising USD 924m through a block trade and completing a staged exit started in late 2020.
It is the latest in a string of share sales worth more than USD 1.6bn in total, with local media estimating the combined proceeds at up to USD 2.2bn. As recently as last May, BPEA EQT sold about 2.1m shares at INR 4,125 apiece to generate about USD 109m.
Coforge shares closed at a 19-month high of INR 5,375 on August 24, giving the company a market capitalisation of INR 329.5 (USD 4bn). The stock has risen more than 300% since May 2019, when BPEA EQT and co-investors acquired a 70.1% stake in the business – then known as NIIT Technologies – for around INR 61bn.
Revenue and EBITDA has doubled since that investment, with the former crossing USD 1bn in April. Revenue for the 12 months to March was INR 80.1bn, up 25% year-on-year. Over the same period, EBITDA rose 26% to INR 14.1bn and net profit improved 5% to INR 6.9bn.
BPEA EQT attributed the growth to various initiatives, including a fruitful M&A strategy. This included enhancing the sales organisation, refocusing on core verticals, and building digital and artificial intelligence (AI) capabilities. Coforge acquired SLK Global, a tech-enabled business process management (BPM) provider, in 2021.
“Tech services is a high conviction thematic for BPEA EQT and Coforge is benefitting from multiple sector tailwinds, such as AI enabling the existing apps estate, replacement of legacy systems and a continuing talent shift to Asia,” Hari Gopalakrishnan, a partner at BPEA EQT, said in a statement.
“The company’s long and sticky client relationships and deep technical expertise make it integral to the performance of multiple global market leaders in the banking, insurance and travel sectors.”
Founded in 1992 as a division of training services provider NIIT, Coforge is active across a range of IT service areas, including app development, infrastructure management, and BPM. It has a presence in 21 countries with 26 delivery centres across nine countries.
BPEA EQT is currently deploying its seventh flagship pan-Asian fund, which closed on USD 6.5bn in late 2019; Fund VIII closed on USD 11.2bn last September.
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