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Persistent secures strong majority stake in Nagarro

Persistent secures strong majority stake in Nagarro

Money Moves

Indian IT firm's takeover draws 94% of Nagarro shares, setting up a squeeze-out, a delisting, and a debt-funded close.

October 21st, 2026: Crisil rates Persistent debentures AA+ on watch

Overview

Updated Oct 27

Persistent Systems, an Indian IT firm, holds about 94% of Nagarro SE after its takeover offer closed October 6. The result far exceeds the 50%-plus-one threshold. Persistent expects the deal to close by the end of the first quarter of 2027, with a few regulatory approvals still outstanding.

Once the deal closes, Persistent plans a squeeze-out of Nagarro's remaining minority shareholders and a delisting from the Frankfurt Stock Exchange. The company is funding the deal with debt and equity. On October 15 its board approved a qualified institutional placement (QIP, a share sale to institutional investors) of up to $450 million. On October 21 it launched the QIP to raise up to ₹4,265 crore. Rating agency Crisil assigned AA+ to Persistent's proposed debentures but placed the rating on watch for possible change. CEO Sandeep Kalra said he hopes the remaining approvals arrive within four to six weeks, with eight weeks as the outer estimate.

Why it matters

Minority Nagarro shareholders face being bought out at EUR 81 a share, whether or not they tendered, once the squeeze-out takes effect.

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Key Indicators

94.04%
Nagarro share capital secured by Persistent
Combines shares tendered in the offer with the 22.10% bought from Lantano Beteiligungen.
EUR 81
Cash offer per Nagarro share
Price paid to tendering shareholders, at a premium to the market price.
8.9M
Nagarro shares tendered
Total shares offered into the takeover across both acceptance periods.
22.10%
Stake bought from Lantano Beteiligungen
Purchased separately under a share purchase agreement before the offer closed.
Q1 CY27
Expected deal close
Close expected by end of Q1 2027, pending regulatory approvals. The CEO hopes for approvals within four to six weeks of October 15.
₹4,265 cr
QIP size (up to)
Equity raise launched October 21 at a floor price of ₹5,550 per share, about $450 million.
~$800M
Proposed Persistent borrowing
Crisil's estimate of new acquisition debt, on top of about $354 million of Nagarro's existing debt.

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People Involved

Sandeep Kalra
Sandeep Kalra
Chief executive, Persistent Systems
Leading the Nagarro acquisition
DT
Detlef Thrun
Chief executive, Nagarro SE
Leading the target company through the takeover

Organizations Involved

PS
Persistent Systems
IT services company
Acquirer

A Pune-based IT services company.
Nagarro SE
Nagarro SE
Digital engineering company
Takeover target

A Munich-based digital engineering and software services firm, listed on the Frankfurt Stock Exchange's Prime Standard.
GG
Galaxy Germany Holding SE
Acquisition vehicle
Formal bidder for Nagarro

A wholly-owned German subsidiary of Persistent Systems that launched and administered the takeover offer.
LB
Lantano Beteiligungen GmbH
Investment holding
Sold its Nagarro stake to Persistent

The shareholder that agreed to sell Persistent a 22.10% stake in Nagarro before the public offer closed.

Timeline

September 2026 October 2026

10 events Latest: October 21st, 2026 · 3 weeks ago
Tap a bar to jump to that date

  1. Crisil rates Persistent debentures AA+ on watch

    Latest Credit

    Crisil assigned AA+ to Persistent's proposed ₹7,000 crore non-convertible debentures and placed the rating on watch with developing implications. It expects leverage to rise after the Nagarro deal.

  2. Persistent opens QIP to raise up to ₹4,265 crore

    Corporate

    Persistent informed exchanges after market close that it opened the QIP, with a floor price of ₹5,550 per share. The shares fell on October 22, and full completion would dilute about 4.9% of pre-issue equity.

  3. Persistent board approves up to $450 million equity raise

    Corporate

    The board approved a QIP of up to $450 million, with combined equity and borrowings capped at $1.25 billion. The CEO said approvals could arrive within four to six weeks.

  4. Persistent announces final takeover result

    Announcement

    About 94.04% secured; Persistent plans a squeeze-out and expects close by Q1 2027.

  5. ICRA rates Persistent debentures on negative watch

    Credit

    ICRA rates ₹5,000 crore of proposed Persistent debentures, keeping the rating on negative watch. The agency sees leverage of 2.0 to 4.5 times combined EBITDA over the medium term.

  6. Persistent's chief delivery officer resigns

    Corporate

    The resignation was filed the same evening Persistent announced its 94% stake in Nagarro. The company did not say the two were linked.

  7. Additional acceptance period expires

    Offer

    The final window for tendering Nagarro shares closes at midnight CEST.

  8. Additional acceptance period opens

    Offer

    Nagarro shareholders get two more weeks to tender shares at EUR 81 each.

  9. Initial acceptance period ends

    Offer

    61.15% of Nagarro shares tendered, reaching 83.25% together with the Lantano stake.

  10. Shareholders approve equity for Nagarro deal

    Corporate

    Persistent shareholders approve issuing up to US$450 million in securities, via qualified institutional placement, convertible bonds, or preferential issue. It reverses Persistent's June statement that the offer was fully debt-funded.

Scenarios

1

Takeover closes, Nagarro goes private

Likely Resolves by Q2 2027

Discussed by: Persistent's own guidance and coverage in Indian tech media

Outstanding regulatory approvals come through and the deal closes by the end of Q1 2027, as Persistent expects. Persistent then squeezes out the remaining minority shareholders and delists Nagarro from the Frankfurt Prime Standard. Nagarro operates as a private Persistent subsidiary going forward.

2

Regulatory approvals delay the close

Possible Resolves by Q3 2027

Discussed by: Persistent, which cited a limited number of outstanding regulatory approvals

One or more outstanding approvals, such as competition or foreign-investment clearances, take longer than planned. The close slips into the second or third quarter of 2027. The offer itself stays valid, but the timetable moves and the squeeze-out comes later than expected.

3

Minority shareholders challenge the squeeze-out price

Possible Resolves by Q2 2028

Discussed by: Takeover law commentary and Nagarro's retail shareholder letters

After the squeeze-out resolution, minority shareholders contest the EUR 81 compensation in German courts, a standard step in German squeeze-outs. Courts occasionally raise the price companies must pay. A ruling could take a year or more, but it would not undo the taking private.

4

Acquisition debt strains Persistent's balance sheet

Possible Resolves by Q2 2027

Discussed by: ICRA, the rating agency that put Persistent's proposed debentures on negative watch

Persistent carries the acquisition debt itself while Nagarro's cash stays inside Nagarro for two years under the no-domination commitment. ICRA sees leverage running 2.0 to 4.5 times combined EBITDA over the medium term. If Persistent's cash flow disappoints or refinancing is costly, the debt could crowd out other spending and lift financing costs.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

July 2008

Infosys acquires Axon Group (2008)

Infosys, then India's second-largest IT services firm, agreed to buy Axon Group, a UK-based ERP consultancy, for about £407 million (roughly $800 million). It was Infosys's biggest acquisition at the time and a bet on moving upmarket into business consulting.

Then

The deal closed in late 2008 after Axon's largest shareholder accepted the bid, giving Infosys a UK-based consulting arm.

Now

It marked Indian IT firms using Western acquisitions to enter new services and markets, a pattern that has continued.

Why this matters now

Like Persistent buying Nagarro, it shows an Indian IT services group absorbing a Western firm to expand its footprint and capabilities.

December 2018

HCL Technologies buys IBM software portfolio (2018)

HCL Technologies agreed to pay $1.8 billion for a portfolio of seven IBM software products, spanning security, marketing, and commerce tools. The deal transferred about 5,000 IBM employees to HCL.

Then

The transaction closed in 2019, making HCL the owner of the brands and their customer base.

Now

It became one of the largest purchases of Western software assets by an Indian IT firm and a model for cross-border tech consolidation.

Why this matters now

It illustrates the broader trend of Indian services firms buying Western technology businesses, the same path Persistent is taking with Nagarro.

Sources

(15)
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Persistent Systems PR Newswire PR Newswire UK EQS News TMCnet Nagarro SE AktienSensor SME Street UK Newshour Mint (Livemint) Moat Margin Research ScanX Trade Crisil CNBC TV18 NDTV Profit