This LIC-Backed Large Cap Firm Is Gaining Despite Possible Private Equity Exit

Shares of digital services firm Coforge rose in early trade on Thursday as investors brushed off the reportedly looming sale of shares by a large private equity backer.

What Happened: Hulst BV, the promoter of Coforge (formerly NIIT Technologies), is reportedly preparing to divest its entire 26.63% stake in the mid-sized IT company through a block deal, sources told CNBC Awaaz.

The floor price for the transaction has been established at ₹4,550 per share, representing a 7.4% discount to the current market price of ₹4,901.95.

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Hulst BV, headquartered in the Netherlands, is owned and controlled by funds affiliated with private equity firm BPEA (Baring Private Equity Asia).

The sources said that Hulst BV is looking to sell 1.62 crore shares, translating to an estimated deal size of approximately ₹7,400 crores.

Previous Moves: This move follows Hulst BV’s earlier divestment of a 3.5% stake in Coforge ₹887 crore in May, executed through an open market transaction at an average share price of ₹4,125.44.

BPEA had initially acquired a stake in the mid-tier IT firm back in 2019, holding a 63.99% stake in Coforge at the close of the March 2021 quarter. This stake has since been reduced through successive stake sales.

As of the end of June 2023, Hulst BV retained a 26.63% stake in the company, according to BSE data. Life Insurance Corporation (LIC) of India holds 6.01% of Coforge, as per the latest shareholding data.

Price Action: Co-forge’s share price was up 2.13% to ₹5,017.95 at open on Thursday.

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