- Persistent Systems shareholders approved raising borrowing limit to $1.25 billion
- The company may raise up to $450 million via equity shares or convertible securities
- Fundraising could involve foreign currency bonds, preferential or institutional placements
Persistent Systems shareholders have approved a proposal to increase the company's borrowing limit to up to $1.25 billion, or around Rs 11,800 crore, according to the outcome of the company's extraordinary general meeting. The approval comes after the IT services company's board in September approved plans to raise funds through debt and equity-linked instruments, potentially paving the way for a sizeable capital raise.
Persistent Systems may raise up to $1.25 billion through long-term debt financing, while separately considering a fundraise of up to $450 million through equity shares, convertible securities or other permitted instruments.
The proposed $450 million fundraising could involve equity dilution. According to the company's exchange filing, the issue may be undertaken through foreign currency convertible bonds, a preferential issue, a qualified institutional placement or other permitted routes. The company said the equity-linked fundraising could comprise equity shares, debt securities convertible into equity shares or other securities that can be converted into equity.
The proposed fundraising gives Persistent Systems flexibility to tap multiple routes depending on market conditions and funding requirements.
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The debt component of the proposed fundraising could include external commercial borrowings, non-convertible debentures and other similar instruments. Persistent Systems has said that the combined amount raised through the debt and equity-linked options will not exceed $1.25 billion.
The funding approvals come as Persistent progresses with its proposed acquisition of Nagarro. The company has secured 83.25% of Nagarro's outstanding share capital. The initial acceptance period for the Nagarro transaction ended on Sept. 17. Persistent received the minimum acceptance threshold of 50% plus one share, allowing the transaction to move forward.
The company has also made progress on regulatory approvals. Three of the five required foreign direct investment-related approvals have been received, including clearance from Germany. Persistent has also obtained all required merger-control clearances.
Following the regulatory progress, an additional acceptance period of two weeks began on Sept. 23. The acceptance period ended on Oct. 6, with the company expected to announce the acceptance results thereafter.
Persistent has said the proposed Nagarro transaction is expected to close by the fourth quarter of calendar year 2026 or the first quarter of calendar year 2027, subject to the completion of the remaining transaction requirements.
Persistent Systems Share Price Today
Persistent Systems shares closed 0.16% lower at Rs 5,521 per share on Tuesday. The shares have risen 6.95% in one week but fallen 2.16% in one month. The shares are down 12.12% year-to-date but up 6.39% in one year.
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