Coforge Acquires AI Firm Encora for $2.35 Billion in All-Stock Deal

Coforge, an Indian information technology services company, has announced its acquisition of Encora, a Silicon Valley-based artificial intelligence firm, in a significant all-stock transaction valued at $2.35 billion (approximately ₹21,133 crore). This deal, reported on 26 December 2025, is one of the largest overseas acquisitions by a mid-tier Indian IT firm.

The acquisition will be financed entirely through equity, with Coforge issuing preferential shares worth around $1.89 billion to Encora’s current shareholders, which include prominent private equity firms Advent International and Warburg Pincus. Upon completion of the transaction, these investors are set to hold approximately 20% of Coforge’s expanded share capital, as per a regulatory filing.

Coforge has entered into a definitive agreement to acquire 100% of Encora's shares from its existing shareholders. The company’s Chief Executive Officer, Sudhir Singh, highlighted that this acquisition will significantly bolster Coforge's AI-led engineering capabilities. "The acquisition establishes a scaled AI-led engineering capability moat for Coforge, underpinned by capabilities to help create enterprise data cores and cloud foundations purpose-built for AI," Singh stated.

Encora, which focuses on AI-native software engineering services, is projected to generate revenue of about $600 million in the fiscal year 2026, with an adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin nearing 19%. Following the acquisition, Coforge anticipates that the combined entity will form a technology services platform valued at $2.5 billion, with AI-led engineering, data, and cloud services expected to collectively generate nearly $2 billion in revenue by the fiscal year 2027.

The company estimates that the AI-led product engineering segment could exceed $1.25 billion, while cloud services may reach around $500 million, and data engineering could surpass $250 million. Additionally, Coforge expects its high-tech and healthcare sectors to scale to annual revenues exceeding $170 million each immediately after the transaction.

The financial aspects of the transaction will also involve a bridge loan or a qualified institutional placement of up to $550 million to settle Encora’s existing debts. The acquisition is priced at ₹1,815 per share, representing an 8.5% premium over Coforge’s closing share price on the day of the announcement.

Coforge's acquisition of Encora is seen as a strategic move to enhance its AI capabilities and expand its presence in the United States and Latin America. With 58% of Coforge's revenue currently coming from these regions, the deal is expected to fortify the company’s foothold in the Western and Midwestern United States, as well as provide access to Encora's workforce of approximately 3,100 employees in Latin America.

In fiscal year 2025, Coforge reported revenues of ₹120.51 billion ($1.34 billion), marking a 32% increase from the previous year. Meanwhile, Encora generated a turnover of $516 million. The deal is anticipated to close within four to six months, with BDA Partners acting as the investment banker for the transaction. This acquisition could potentially elevate Coforge to become the seventh-largest IT firm in India, surpassing competitors such as Persistent Systems and Mphasis, according to technology advisory firm EIIR Trend.