Cigniti shares slip ~7% as Coforge announces amalgamation

30 Dec 2024 , 02:52 PM

Cigniti Technologies Ltd. shares fell by more than 7%, while Coforge shares remained unchanged on Monday, December 30, following the news of the two businesses’ merger.

Coforge, a mid-tier IT company, announced that its board has authorized a plan to merge with Cigniti Technologies via a share swap arrangement.

Cigniti stockholders will receive one equity share of Coforge for every five equity shares of Cigniti they own.

The share swap will result in a 4% dilution of Coforge equity shares.

According to reports, the share swap ratio is consistent with the current share prices of both firms, with Cigniti trading at a slight 2% discount.

In the fiscal year 2024, North America accounted for 48% of Coforge’s global revenue, since the company’s presence in the United States has primarily been on the East Coast.

Coforge’s stock has risen by 90% since the news of the Cigniti acquisition, while Cigniti’s stock is up 35%. This discrepancy in the stock price performance of both firms would benefit Coforge’s shareholders because it leads to smaller possible dilution.

At around 1.04 PM, Cigniti was trading 5.82% lower at ₹1,741.85 per piece, against the previous close of ₹1,849.40 on NSE. The counter touched an intraday low of ₹1,705.20.

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