Oracle may sell stake in OFSS to gauge investor appetite amid credit pressure: Exclusive

Oracle Corp is exploring a potential stake sale in its listed Indian subsidiary, Oracle Financial Services Software Ltd. (OFSS), as the US technology giant looks to strengthen its financial flexibility amid rising capital expenditure and mounting credit pressure, CNBC-TV18 has learnt from sources.

According to sources, Oracle Corp has sent out feelers to investors to gauge interest in acquiring a stake in OFSS. The size of the proposed stake sale has not yet been finalised and will depend on investor appetite.

Oracle Corp held a 72.41% stake in OFSS as of the end of the June quarter.

The proposed sale comes at a time when Oracle Corp is facing increased pressure on its balance sheet. Earlier this month, S&P Global Ratings downgraded the company's long-term issuer credit rating to BBB-, placing it just one notch above junk status.

S&P said Oracle's rapidly expanding artificial intelligence infrastructure business has increased its overall credit risk, while also forecasting weaker free operating cash flow in fiscal 2027 than previously expected. The ratings agency also warned it could downgrade Oracle further if leverage remains above 4.5 times.

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Oracle has significantly increased capital spending as it builds hyperscale data centres, power infrastructure and high-end GPU clusters to compete with cloud providers such as Amazon Web Services, Microsoft Azure and Google Cloud.

The company has also paused share buybacks as free cash flow has not been sufficient to cover both capital expenditure and dividend payouts. In June, Oracle said it expects to conclude a round of layoffs affecting nearly 30,000 employees, or about 18% of its global workforce.

Oracle Corp's shares have declined more than 41% over the past year and are down over 60% from their September 2025 peak.

Meanwhile, OFSS has outperformed its parent, with the stock gaining about 20% over the last year and rising nearly 60% from its March 2026 lows.

In a clarification filed with the stock exchanges later on Thursday, Oracle Financial Services Software (OFSS) said it had no knowledge of any such development and that there was no event requiring disclosure under SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations before the publication of the news report.

The company also said that it is the company's policy not to comment on market speculation.

OFSS further noted that it had already disclosed its June-quarter (Q1FY27) results to the exchanges on July 22. The same filing had also informed investors about the resignation of long-serving Managing Director and Chief Executive Officer Makarand Padalkar and the appointment of Chief Financial Officer Avadhut Ketkar as the new Managing Director and CEO.

Shares of Oracle Financial Services Software ended off the day's lows at ₹10,785 on Thursday, down 0.6%. The stock has gained more than 40% so far in 2026 and close to 23% over the last 12 months.