Persistent Systems Shares In Focus As Board Approves $1.25 Billion Fundraise: Check Details

Shares of Persistent Systems fell more than 3% to the day’s low of ₹5,500 on the Bombay Stock Exchange (BSE) on Thursday after the company announced a large fundraising plan.

The company’s board has approved plans to raise up to $1.25 billion through long-term debt and other eligible instruments. The proposed fundraise will be carried out in one or more tranches and will require shareholder and regulatory approvals.

At 11:51 AM, Persistent Systems shares were trading at ₹5,617.50, down 1.27%.

Persistent Systems Fundraise Plan

The board has approved borrowing of up to $1,250 million through external commercial borrowings (ECB), non-convertible debentures (NCDs) and other similar instruments.

The company can raise the funds in one or more tranches, depending on the requirements. The proposal remains subject to the required shareholder and regulatory approvals.

In a separate proposal, the board may consider raising up to $450 million through securities or other eligible instruments that can be converted into equity shares.

The company has listed several possible routes for this fundraise, including:

• Foreign currency convertible bonds (FCCBs)

• Preferential issue

• Qualified institutional placement (QIP)

• Any other permitted mode

This proposed equity-linked fundraising would also take place in one or more tranches and would need shareholder and regulatory approvals.

At the end of the June quarter, promoter entities held a 30.29% stake in Persistent Systems. Public shareholders held 69.04%, according to data available on the stock exchanges.

Persistent Systems Q1 Financial Performance

Persistent Systems reported a mixed set of numbers for the June quarter.

Dollar revenue increased 3.8% sequentially to $452.4 million. Revenue in rupee terms rose 6.1% sequentially to ₹4,303.2 crore.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased 4.5% sequentially to ₹802.2 crore, while earnings before interest and taxes (EBIT) rose 4.2% to ₹686.9 crore. The EBIT margin, however, declined 30 basis points to 16%.

Net profit fell 8.7% quarter-on-quarter to ₹483 crore. The company attributed the decline mainly to a forex loss.

Persistent Systems Share Performance

Persistent Systems shares have gained 21% over the past six months but remain down 9% year to date.

Over the past five years, the stock has gained more than 200%.

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