Shares of Coforge were trading in the green and 2% higher on 26 June after the Competition Commission of India’s (CCI) approval of Coforge’s acquisition of a stake in Cigniti Technologies. 

According to a statement issued by CCI, the company will acquire a minimum of 50.21% stake and a maximum of 54% stake in Cigniti Technologies on a fully diluted basis. 

On 2 May, the company’s Board of Directors approved acquiring a stake in Cigniti Technologies at Rs 1,415 per share. 

This acquisition of Cigniti Technologies will not only help the company become a $2 billion company by fiscal year 2027 but will also create synergies that will enhance Coforge’s operating margins by 150 to 250 basis points over the course of that year.

With this acquisition, the company will be able to scale up and create three new business verticals, including hi-tech, retail, and healthcare. 

Coforge estimates that the merged company’s healthcare and hi-tech verticals will operate at about $50 million yearly following the merger, while its retail vertical would operate at over $100 million annually.

Considering that Coforge has largely concentrated on the US East Coast, its North American activities today generate just 48% of its total worldwide revenue. Coforge has made rapid North American expansion a high priority.

The company added, “The acquisition of Cigniti will expand Coforge’s North America revenue by 33% and help us establish a significant beachhead in the crucial West, South-West and Midwest markets.”

Coforge’s share price has increased by almost 15% over the past year, but this hasn’t kept pace with the significant benchmark Nifty 50 index, which has increased by over 25% over the same period.

At 12:31 pm, the shares of Coforge were trading 0.33% higher at Rs 5,368.30 on NSE.