Coforge Experiences Share Price Drop Amid Acquisition News
Coforge’s stock has seen a significant decline, plummeting over 7% on Friday, marking its fourth consecutive session of losses. The shares dipped to ₹6,625 on the Bombay Stock Exchange (BSE) as investors reacted to the company’s recent announcement regarding its acquisition of Rythmos Inc. Through its wholly owned subsidiary, Coforge Inc., the firm aims to expand its footprint in the IT sector.
Acquisition Details of Rythmos Inc.
In a strategic move, Coforge revealed it has acquired a 100% stake in Rythmos Inc. for $48.7 million. This acquisition, finalized under a stock purchase agreement signed in March 2025, involves the buying of all outstanding shares from Rythmos’ stockholders.
- Initial Investment: The upfront payment stands at $30 million, with potential adjustments based on specific conditions.
- Performance-Based Earnouts: An additional earnout of up to $18.7 million will be payable in two installments, contingent on reaching predefined revenue and EBITDA targets for 2025 and 2026.
Market Reaction to Coforge’s Stock
Despite the acquisition, Coforge’s share price trends indicate ongoing challenges. The stock has dropped by 30% year-to-date (YTD) and is currently trading about 34% below its 52-week high. Over the past month, the decline has reached 7%, although the company has demonstrated resilience with a 15% increase over the past year and an impressive 547% gain over the last five years.
As of 12:20 PM, Coforge’s shares were trading at ₹6,716.80, reflecting a 6.15% decrease. Investors are closely monitoring the developments surrounding the acquisition and its potential impact on Coforge’s future growth.
In conclusion, while the acquisition of Rythmos Inc. represents a significant step for Coforge, the recent stock performance suggests a cautious atmosphere among investors. The coming quarters will be crucial as the company works to integrate Rythmos and meet its ambitious performance targets.
