Coforge shares fall to the day's low ahead of board meet to raise funds

Shares of Coforge Ltd. declined on Friday, December 26, as the company will hold a board meeting to consider a fund raising proposal.

The company had informed the stock exchanges regarding the same on Tuesday, December 23.

Coforge will also be holding an analyst meet later this evening as well. The stock, since the announcement, has declined 7% in the last two sessions.

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

This is the second fund raise Coforge is looking at over the last 18 months. Earlier, it had raised ₹2,240 crore

via the issue of shares to eligible institutional buyers via a qualified institutional placement (QIP) to fund the acquisition of Cigniti Technologies.

It had issued shares to eligible institutions at ₹4,600 apiece. The price is not adjusted for the stock split that the company carried out earlier this year.

Coforge has negligible cash on its book and is eyeing $2 billion revenue run-rate over the next few quarters. During its last analyst meet, the company had assured there would be no further data center investments in the offering.

However, the stock is under pressure because of a risk to further dilution because of the fund raise, the firm's ash conversion guidance is the weakest among its peers. Also, concerns over whether the 70% free cash flow/PAT guidance will be under threat.

Coforge shares were down 2.7% at ₹1,691.5 apiece around 11.30 am on Friday. The stock has declined 12.2% this year, so far. 

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