Coforge to Finance Encora Acquisition Through Bank Loan, Rules Out…

Sarah J · 2026-01-27T16:31:46.000Z

Indian IT services firm Coforge Ltd has confirmed that it will fund the financing component of its planned US$2.35 billion acquisition of US-based digital engineering firm Encora through a bank loan at an attractive mid-single-digit interest rate, rather than proceeding with a Qualified Institutional Placement (QIP) for equity fundraising. Management emphasized this choice helps avoid share dilution while still meeting the financing needs of the transaction. The acquisition, structured as an all-stock share swap, has Coforge issuing about 93.8 million equity shares to Encora shareholders who will hold roughly 20 – 21 % of the combined company upon completion. The transaction remains subject to regulatory approvals and is expected to close by approximately Q1 FY2027. In its Q3 FY2026 results, Coforge delivered continued growth despite not yet reflecting Encora’s contribution. Revenue for the quarter was around ₹4,188 crore with sequential and year-on-year growth, and the company secured six large deals during the period. Management noted that synergies from the integration of Encora especially in AI-led engineering, data, and cloud services are anticipated to start materializing early in the next fiscal year. Coforge’s decision to pursue bank financing over a QIP signals confidence in its capital structure and market position, even as the IT services sector navigates client spending shifts and integration execution risks.

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Coforge to Finance Encora Acquisition Through Bank Loan, Rules Out… | SEINET