Persistent Systems has announced the completion of its largest corporate acquisition to date through the Qualified Institutional Placement (QIP). The Special Committee of the Pune-based mid-sized technology firm approved opening the issue, setting the floor price, and clearing initial drafts of the placement document. The company will seek to raise up to $450 million, valued at about ₹4265 crore on existing reference exchange rates. The book running lead managers to the transaction are J.P. Morgan India, IIFL Capital Services, and HSBC Securities, while the floor price has been pegged at ₹5,550 per share with an approved discount up to 5%.

Financial performance and the Nagarro acquisition

The capital raising program follows the release of Persistent Systems’ second quarter fiscal 2027 earnings. The company’s consolidated revenue from operations for the quarter rose by 30.25% year-on-year to ₹4,663.90 crore from ₹3,580.72 crore in the previous quarter of the same year. 

Revenue increased sequentially by 8.38% over the year-ago amount of ₹4,303.22 crore for the first quarter, the standalone financial results data show. The company’s consolidated net profit, however, fell by 25.44% YoY to ₹351.51 crore from ₹471.47 crore in the same quarter last year. The net profit declined by 27.23% each year sequentially from ₹483.04 crore and basic EPS was at ₹22.42.

The focus of the significant capital raising is cash offer of Nagarro, consisting of a cash bid of €81 per share supported by bridge financing from Barclays. Persistent Systems reports approximately 35% of its revenue as coming from the banking and financial services niche, 25% from healthcare and life sciences, and nearly 40% from software, hi-tech and emerging industries. 

North America is currently about 80% of its business, but the purchase of Nagarro should allow it to increase its revenue contribution from Europe from 9% to around 22%, and also improve its product offering by adding to its core of industrial, automotive and enterprise resource planning expertise.

Order book momentum

Persistent Systems is approaching this revolutionary acquisition in a strong way as a result of its healthy booking orders and continued operational momentum. Persistent Systems has made booking orders worth $633.5 million in the September quarter and recorded record $1.15 billion in bookings in the previous quarter. The company has experienced 26 quarters of consecutive sequential revenue growth. In the Indian technology industry, growth in the industry is facilitated by the increased demand for artificial intelligence-driven engineering, cloud modernization, and product development.

Conclusion

This Qualified Institutional Placement by Persistent Systems, initiated by the company in partnership with the IDG-XPM, at ₹4,265 crore is a landmark strategic move to finance the acquisition of Germany’s Nagarro without overwhelming the company’s balance sheet. While the net profit contracted by 25.4% YoY to ₹351.51 crore in the second quarter of the fiscal year 2027, the firm’s growth journey is nevertheless bolstered by top-line revenue growth, robust new bookings, and better global expansion. Persistent Systems is expanding its footprint in Europe and is getting ready to meet the changing needs of the international technology and enterprise market through the addition of advanced industrial and software capabilities.