Cigniti Tech Shares Tumble 7% on Coforge Merger

30 Dec 2024 , 02:47 PM

Following the board of mid-tier IT business Coforge Ltd. approving a merger plan to acquire the smaller IT company, which would be finalized upon the permission of the national company law tribunal, Cigniti Technologies‘ shares fell as much as 6.8% on Monday to Rs 1,723 on the BSE.

Following a Friday board meeting, Coforge informed shareholders via a stock exchange announcement that the transaction had been approved. Subject to the national company law tribunal’s permission, Coforge will acquire the smaller Cigniti Technologies as part of the plan.

According to the exchange filing, the Board of Directors of Coforge Limited has, among other things, reviewed and approved the Scheme of Amalgamation of Cigniti Technologies Limited with and into the Company and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, based on the recommendation of the Audit Committee and the Independent Directors.

According to the declared share swap ratio, shareholders of Cigniti will get one equity share of Coforge for each five Cigniti shares they now own.

According to the exchange filing, “under the proposed scheme, equity shares of the company shall be issued to the shareholders of the transferor company which would be listed on BSE Ltd and National Stock Exchange of India Ltd (collectively referred to as the “Stock Exchanges”)… 1 (one) equity share of the Transferee Company of INR 10/- (Rupees Ten) each.

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