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Mutual Funds, Foreign institutional investors lap up Coforge

September 27, 2023

Mutual Funds, Foreign institutional investors lap up Coforge
Mutual funds and foreign institutional investors have taken a keen interest in acquiring a stake in Indian IT firm Coforge after promoter-investor Baring PE Asia (Baring PE) divested its entire shareholding.

The promoter-investor firm had sold the remaining 26.63% stake on August 24 in a single block deal for ₹7,683 crore.
 
Aditya Birla Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund, SBI Mutual Fund, Morgan Stanley Asia and Societe Generale were some of the buyers in the block deal.
 
Baring PE, which has approximately $20 billion (₹1.66 trillion) in funds under management, acquired a majority 70% stake in the company in May 2019. The shares of the company rallied from the lowest levels of ₹864 per share in 2020 to ₹5,600 in 2023.
 
It purchased a total of 43.72 million shares of Coforge, about 70%, at a price of ₹1,394 apiece, aggregating to ₹6,095 crore. However, the average selling price per share was ₹4,146, totaling to ₹17,650 crore.
 
This gave the PE firm a return of close to 197% at a CAGR of 43.74 in four years. The global PE firm made a profit of nearly ₹12,000 crore in the last four years.
 
Compare this with Coforge’s (earlier NIIT) share price growth since listing at 16.43% over 15 years and Baring PE has made handsome profits.
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