Coforge–Encora Combination A Strong Push Towards AI-Led Engineering: Warburg Pincus — Exclusive

The $2.35 billion combination of Coforge Ltd. and Encora is a strategic bet on the future of AI-led engineering services, not an exit for private equity investors, according to Warburg Pincus.

Speaking to NDTV Profit, Vishal Mahadevia, Head of Asia Private Equity at Warburg Pincus, said the transaction should be viewed as a long-term partnership between two firms rather than a sell-down by financial sponsors. Coforge has agreed to acquire Encora from Advent International, Warburg Pincus and other minority shareholders for an enterprise value of $2.35 billion.

“This is not an exit. It is a combination of two firms,” Mahadevia said, adding that Warburg Pincus has known Encora for a long time, including when it was a much smaller company.

Mahadevia said the global IT services industry is going through a structural transformation, creating an opportunity for companies that can stay ahead of the curve. “The IT industry is undergoing its own transformation, and that creates an opportunity. This partnership is about positioning for an AI-led tech services world,” he said.

According to him, the Coforge–Encora combination creates a much stronger platform to capitalise on this shift. “If you can create a leader that provides AI-led engineering solutions, it will be a very strong move. This combination creates a much stronger company to take advantage of the opportunities in this space,” Mahadevia said.

While acknowledging that the IT services sector has faced challenges in recent years, Mahadevia said the focus should now be on the opportunities ahead rather than past headwinds. “We have always liked this space. There have been challenges, but the bigger conversation should be about the opportunities. AI-led engineering is one of the most exciting ones,” he said.

Beyond technology services, Mahadevia struck an optimistic tone on India’s broader investment landscape. He cited Warburg Pincus’ long-standing exposure to consumer, manufacturing and financial services as examples of where long-term value is being created.

Referring to Haier, he described it as a strong brand with a compelling value proposition for consumers. “Haier offers a terrific price–value equation. We have known companies like Haier and Bharti for a long time and continue to invest in manufacturing in India,” he said, adding that “the sky is the limit for India”.

Mahadevia also underlined the importance of a strong banking system to support economic growth. Warburg Pincus was among the earliest institutional investors in Kotak Mahindra Bank, initially acquiring a 10% stake. “We were the first firm to get a 10% stake in Kotak Bank and have seen the banking sector develop over time,” he said.

According to him, the banking sector still requires significant capital and has substantial room to grow. “We remain positive on the banking space for the next few years,” Mahadevia added.

He also pointed to emerging consumer brands as another area of opportunity, saying companies like boAt have significant potential as India’s consumption story deepens.

Taken together, Mahadevia’s comments suggest that the Coforge–Encora deal is less about financial engineering and more about strategic alignment. As global demand shifts towards AI-native and engineering-led technology services, the combined entity is being positioned to ride the next phase of growth in the IT services industry — with Warburg Pincus firmly staying invested in the journey.