Persistent Systems raises ₹4,264 crore via QIP amid Nagarro acquisition

what happened

Persistent Systems Ltd. told exchanges that it closed its Qualified Institutional Placement (QIP) on Monday, October 26. The company raised a total of ₹4,264 crore. Its board approved the allotment of 76,83,981 shares at ₹5,500 apiece, a 6% discount to Monday's closing price and a 3.66% discount to the QIP floor price.

Domestic mutual funds were the main buyers. SBI MF took 9.38% of the issue, while ICICI Prudential MF, Kotak MF and Aditya Birla Sun Life MF each took 7.62%. Government Pension Fund Global was the only foreign portfolio investor with a holding of 5% or more, at 5.86%. Paid-up equity capital will rise from ₹79.07 crore to ₹82.91 crore.

The QIP was launched on October 21 to fund the purchase of Nagarro SE, with a total outlay of $1.45 billion. The initial bridge loan is now being refinanced through rupee debt sales and this placement. In June, the company had said it did not need a QIP for the deal.

why it matters

Two points matter for markets: the placement was priced at a discount, and the company reversed its earlier stance on equity funding. The stock still closed 2.1% higher at ₹5,850 but is down 7% so far this year. In the September quarter, EBIT margin fell 100 basis points to 15%, and net profit dropped 27% sequentially due to one-off deal expenses.

market impact

Persistent Systems and Indian IT services: more shares in circulation add supply pressure, and investors will watch debt levels after the Nagarro purchase.

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