Athira Sethu
Kochi, 27 Dec 2025
Indian IT company Coforge made an announcement on Friday that it will acquire the US-based AI company, Encora. This purchase will add value to Coforge as it will boost their AI capabilities and will also help them in expanding their business in the United States and Latin America. The total value of the purchase is $2.35 billion.
Nowadays, most Indian IT firms are spending more on their AI-related initiatives. AI is gaining popularity at a high rate, and firms are of the idea that this will bring in a lot of revenue in the coming decades. Coforge is also eager to cash in on this rising demand for AI solution providers.
Encora has strong backing from large investment houses Advent International and Warburg Pincus. The company offers AI-based services in the domains of product development, cloud services, and data engineering. According to Coforge, the merged entity may expect a revenue of $2 billion in a year as of March 2027.
After the acquisition, the profit margin that the new firm will make before the payment of interest and tax will be 14%. Coforge Limited also expects that this deal will raise its EPS in the Financial Year 2027.
For meeting the equity cost of $1.89 billion, Coforge has to issue preference shares at Rs 1,815.91
to cover this expense. The cost is higher compared to their current stock price. Coforge’s shareholders receive a 20% stake in this new entity as consideration for their shares of Encora.
Also, Coforge is contemplating repayment of Encora’s debt through an issue of up to $550 million. This will be in the form of a short-term loan or through issuing additional shares to institutional investors.
At present, Coforge gets 58% of its revenues from the Americas: North and South America. After this acquisition, its foothold will be further cemented, particularly in the western and Midwestern parts of the US. Additionally, Coforge gets to tap into the Latin American employee base of Encora, who have a total of 3,100 employees.
In financial year 2025, Coforge reported 120.51 bn rupees, posting a 32% increase in revenues from last year. Encora reported $516 M for the same period.
The acquisition is expected to be completed within four to six months, for which BDA Partners assisted with managing.
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Here is a previous story on earnings comparison of Coforge:
