Here’s what fuelled nearly 10% surge in Coforge shares on Thursday

Shares of Indian multinational information technology company Coforge were under radar on Thursday after the stock gained nearly 10 per cent amid the reports of a block deal.

The shares of the company closed at Rs 5381.20 apiece, up 9.56 per cent, on BSE on Thursday.

In a block deal 1.54 crore shares, amounting to 26 per cent shareholding in the company, changed hands during intra-day trade. The total size of the transaction was Rs 7,329.3 crore.

While the buyers and sellers were not known immediately, Zee Business reported earlier that Coforge’s promoter, Hulst BV may sell its entire 26.6 per cent stake in the company through a block deal of 1.63 million shares. Netherlands-based Hulst BV is an affiliate of Hong Kong-based Baring Private Equity Asia. A floor price of Rs 4,550 per share has been set for the block deal. This means that the shares in the block deal are being sold at a discount of 14.90 per cent compared to the current market price (CMP). 

In 2019, Hulst BV became a promoter of Coforge with a controlling 70 per cent stake which the equity firm had acquired for an average price of Rs 1,394 per share. Since September 2020, Hulst BV has been consistently reducing its stake in the company.

The Dutch company has pared down its stake in Coforge in nearly every quarter since 2020:

• September 30, 2020: 70.3 per cent
• December 31, 2020: 64per cent
• June 30, 2021: 55.7per cent
• September 30, 2021: 50.2per cent
• March 31, 2022: 40.1per cent
• March 31, 2023: 30.2per cent
• June 30, 2023: 26.6per cent

According to a Nuvama Report, the increase in free float shares could lead to a higher weightage in the FTSE Index with inflows of around $29 million (approximately 241 crore). The company’s shares have gone up over 12 per cent over the past month and over 43 per cent over the past year long period.