Infotech firm Coforge Ltd is set to become the fourth Indian information technology (IT) firm to list in the US via the American Depository Receipts (ADR) route, with the company filing papers with the US Securities Exchange Commission (SEC) for an initial public offering (IPO) through ADRs.
Coforge will be joining the likes of peers Infosys, Wipro, and Sify. The company’s board has given the nod to selecting the New York Stock Exchange for the ADR offer.
Coforge, previously known as NIIT Technologies Ltd, will be the 17th Indian company to list ADRs in the US. The company, in a regulatory filing with the BSE, said that eligible shareholders seeking to participate in the ADR offer can apply for it until December 2 this year.
Citi Group, JP Morgan, Barclays, BoFA Securities, Credit Suisse, Deutsche Bank Securities, Baird, Cowen, Needham & Company, Everscore, Evercore ISI, and William Blair, are lead bookrunners for the issue.
Coforge is promoted by Hong Kong-based private equity (PE) firm Baring Private Equity Asia, which currently holds a 50.2% stake in the company. Baring will be selling a part of its stake, according to the regulatory papers filed.
In August this year, Baring had divested 5.53% in Coforge for Rs 1,587 crore, bringing its total stake in the company down to 50.2%. According to VCCircle estimates, the PE firm had clocked about 75% annualised return from its total investment in around two years.
Baring had first come in as an investor in 2019 when it had signed deals to buy 30% stake in NIIT Technologies and made an open offer to buy up to 26% more in the Indian company. By the end of that year, Baring ended up owning over 70% stake through an aggregate investment of over Rs 6,075 crore. However, from April 2020 till May 2021, Baring sold over one crore shares for close to Rs 2,665 crore, bringing down its stake to 55.7%.
Coforge, in October had reported strong growth in its September quarter revenue numbers. The management in the post-earnings call had said that it was confident of delivering earnings before interest tax depreciation amortisation (EBITDA) margin of 19% in FY22, with an over 100 basis points sequential expansion in the remaining quarters of 2021-22 (FY22).
