non-convertible debentures: Persistent Systems shares fall over 3% as board gives nod for $1.25 billion fundraise. Check details

Shares of Persistent Systems declined over 3% to their day’s low of Rs 5,500 on the BSE on Thursday after the company announced its board of directors have approved plans to raise up to $1.25 billion through long-term debt financing and other eligible instruments.

The board approved borrowing up to $1,250 million through external commercial borrowings (ECB), non-convertible debentures (NCDs) and other similar instruments. The fundraise can occur in one or more tranches, subject to shareholder and regulatory approvals.

The board may also consider raising up to $450 million through securities or eligible instruments that can be converted into equity shares. The proposed routes include foreign currency convertible bonds (FCCBs), a preferential issue, qualified institutional placement (QIP) or any other permitted mode. This fundraise would also be carried out in one or more tranches, subject to the required shareholder and regulatory approvals.

At the end of the June quarter, promoter entities held a 30.29% stake in Persistent Systems, while public shareholding stood at 69.04%, according to data available on the stock exchanges.

Persistent Systems Q1 snapshot

For the June quarter, dollar revenue rose 3.8% sequentially to $452.4 million, while revenue in rupee terms increased 6.1% to Rs 4,303.2 crore.

EBITDA climbed 4.5% sequentially to Rs 802.2 crore, and EBIT rose 4.2% to Rs 686.9 crore. However, the EBIT margin contracted 30 basis points to 16%. Net profit fell 8.7% quarter-on-quarter to Rs 483 crore, mainly due to the forex loss.
The company posted its highest-ever quarterly bookings during the period, with total contract value (TCV) almost doubling to $1.15 billion. This was supported by a deal worth more than $650 million with a global technology company. Annual contract value (ACV) also increased 20.6% sequentially to $536.8 million.On the operational front, total headcount rose 4.1% to 28,640, while the technical headcount increased by the same 4.1% to 26,905. Utilisation declined to 86.5% from 88% in the previous quarter, while trailing 12-month attrition improved to 12.3% from 13%.

Shares of Persistent Systems have risen 21% in the last six months but remain lower by 9% on a year-to-date basis. In the last 5 years, Persistent Systems stock is up over 200%.

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