Persistent Systems Ltd. shares fell more than 3% in early trade on Monday after the IT services company said its board will consider raising funds through a combination of debt and a qualified institutional placement (QIP).
The stock declined to an intraday low of around Rs 5,666, from the previous close of Rs 5,875. It was trading around Rs 5,671, down 3.47%.
The fundraising proposal appears to have weighed on investor sentiment, with the potential equity issuance raising concerns around share dilution, while additional debt could increase the company's financing costs.
Persistent Systems has been on an acquisition-led growth path. The company recently approved the acquisition of Germany-based Nagarro, with the transaction funded in part through a $1.6-billion bridge loan, adding to concerns over the impact of financing costs on profitability.
The company has also reported strong operating momentum. Persistent Systems' consolidated net profit rose 13.67% sequentially to Rs 483.04 crore in the June 2026 quarter, according to HDFC Securities data.
The stock had gained significantly in recent months, supported by strong deal wins, including a $650-million multi-year deal with a US client, as well as optimism around its AI-led growth strategy and the Nagarro acquisition.
However, Monday's decline suggests investors are now weighing the company's growth ambitions against the potential financial implications of raising fresh capital.
Persistent Systems' board is expected to deliberate on the proposed fundraising, with further details on the size, structure and pricing of the debt and QIP likely to determine the market's next move.
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