Indian IT services provider Coforge embarked on a major acquisition to further strengthen its artificial intelligence or AI capabilities. The company announced it is acquiring US-based AI firm Encora. The total value of this deal is approximately $2.35 billion, which is around ₹21,104 crore in Indian currency.
Strategic push to strengthen AI and global footprint
This acquisition will enhance Coforge's AI capabilities and strengthen its presence in the American and Latin American markets.
Also Read | THIS metal stock is surging like copper - What’s driving the price rally?
Currently, Indian IT companies are increasingly investing in new projects centred around AI technology. Industry experts believe this sector could become a major source of revenue in the future. Encora primarily provides AI services related to product engineering, cloud and data engineering. The company is backed by Advent International and Warburg Pincus.
Encora revenue outlook and EPS impact
According to Coforge's calculations, Encora's annual revenue could reach $2 billion by March 2027. The deal is also expected to have a positive impact on earnings per share by the 2027 financial year.
According to Parekh Jain, founder of technology consulting firm EIIR Trend, this deal could make Coforge India's seventh-largest IT company.
Deal structure and funding details
The equity portion of this deal is valued at approximately $1.89 billion. Coforge will raise this money through preference share issuance. After the acquisition, Encora's shareholders will receive approximately 20 per cent ownership in the combined entity. Additionally, Coforge plans to raise a maximum of $550 million to pay off Encora's debt.
Also Read | December 31 is the last day for submission – Have you received the income tax return email?
This acquisition will further solidify Coforge's position in the North and South American markets. The company's presence will particularly increase in the western and midwestern regions of the United States. The expertise of Encora's approximately 3,100 employees in Latin America will also be added to this company.
Coforge's revenue in the 2025 financial year was ₹12,051 crore, which was 32 per cent higher than the previous year. On the other hand, Encora's annual revenue was approximately $510 million. Coforge has stated that this deal is expected to be completed within the next four to six months.
