Cognizant Exploring India Listing; First Foreign IT Firm to Do So
IN NEWS:
Cognizant Exploring India Listing; First Foreign IT Firm to Do So
ANALYSIS:
- Historic Move in IT Sector: Cognizant Technology Solutions, a Nasdaq-listed IT services company, is evaluating a primary offering and secondary listing in India, which could make it the first foreign IT services firm to list on Indian stock exchanges.
- Leadership Statement: The company’s Chief Financial Officer (CFO) Jatin Dalal confirmed during a post-earnings analyst call that discussions are underway with legal and financial advisers.
- Status of Review:
- The proposal is in its early stage and involves consultations with stakeholders in both India and the United States.
- Dalal emphasised that any offering would depend on market conditions, regulatory clearances, and shareholder interests.
- Valuation Rationale:
- Cognizant’s price-to-earnings (P/E) ratio currently stands at around 14.5, notably lower than Indian IT majors like TCS, Infosys, and Accenture, whose P/E multiples exceed 20.
- The move is seen as a strategic step to narrow the valuation gap and increase investor access from India.
- Complex Listing Process:
- The CFO noted that a primary offering and secondary listing by a foreign company in India involves several regulatory stages and would be a long-term project.
- He reaffirmed Cognizant’s commitment to acting in the best interests of its shareholders while reviewing the proposal.
- Comparative Context:
- Among Indian IT majors, Infosys and Wipro are listed on the New York Stock Exchange (NYSE), while TCS delisted its overseas shares a few years ago.
- Cognizant’s move would mark a reverse trend — a US-based IT firm seeking to list in India.
- Operational Significance of India:
- Although nearly 90% of Cognizant’s revenue is generated from the US and Europe, over two-thirds of its workforce is based in India, making the country its core talent hub.
- The company added 6,000 employees in Q3 2025, bringing total headcount to 349,800, and plans to hire 20,000 freshers in 2025, up from 9,000 in 2024.
- Cognizant continues to expand delivery centres and strengthen its India workforce pipeline to support global operations.
STATIC PART:
- Cognizant Technology Solutions:
- A US-headquartered multinational IT services and consulting company.
- Founded in 1994, headquartered in Teaneck, New Jersey, USA.
- Provides digital, cloud, AI, and consulting services globally.
- Primary Offering:
- Issuance of new shares by a company to raise capital directly from investors.
- Secondary Listing:
- Listing of an already listed company’s shares on another country’s stock exchange without raising fresh capital.
- Price-to-Earnings (P/E) Ratio:
- A valuation metric comparing a company’s current share price to its per-share earnings, indicating how much investors are willing to pay for each unit of profit.
Updated – 30 Oct 2025 ; 12:23 PM | Business Standard