Coforge may acquire Encora for $2 billion, sources say; Fund raise board meet today

Coforge Ltd. is in talks to acquire Encora in a transaction that is likely to be pegged at $2 billion, sources in the know told CNBC-TV18.

The news comes ahead of Coforge's board meet later in the day to consider a fund raising proposal, post which, the company will also be holding an analyst call this evening.

Encora is currently owned by a private equity firm Advent International. Advent acquired its stake in 2021, buying out Warburg Pincus at a valuation of approximately $1.5 billion.

Warburg had backed Encora during its earlier growth phase, helping the company scale its offshore delivery footprint and deepen its exposure to US enterprise clients, before exiting as the business matured into a global digital engineering platform.

Encora focuses on digital engineering and product development services, with capabilities spanning cloud-native applications, data engineering, platform modernisation, and enterprise software development.

The company has a strong presence in North America. It has expanded both organically and through acquisitions under Advent’s ownership, positioning itself as a pure-play digital engineering firm rather than a traditional IT outsourcer.

As of March 2025, Coforge had cash and cash reserves of close to ₹600 crore and had reported a net cash flow of ₹474 crore.

Coforge had acquired Cigniti Technologies in 2024, in a transaction valued at over ₹2,000 crore. The company had raised funds to help complete the acquisition through a QIP process.

Coforge had last issued shares to eligible institutions at a price of ₹4,600 back then, which, when adjusted for the 1:5 stock split, comes down to ₹920 apiece. The stock trades significantly higher than those levels.

Shares of Coforge are down 7% in the last two trading sessions since the board meeting announcement.