Cognizant exploring India listing; first foreign IT firm to do so | Company News
Cognizant is exploring the possibility of listing on Indian stock exchanges, which could make it the first foreign IT services company to do so, its Chief Financial Officer (CFO) Jatin Dalal said on Wednesday.
“We have been assessing a potential primary offering and a secondary listing in India with our legal and financial advisers. As part of this comprehensive review, which is still in its early phase, we are engaging various stakeholders from both India and the US to evaluate the implications of such a potential offering and listing,” Dalal told analysts during a post-earnings conference call.
Valuation gap and strategic review
Dalal was responding to a question on whether Cognizant’s relatively lower price-to-earnings (P/E) ratio compared with Indian peers would prompt leadership to consider a secondary listing.
The Nasdaq-listed firm’s P/E ratio is about 14.5, significantly below that of Tata Consultancy Services (TCS), Infosys, and Accenture, all of which trade at multiples above 20.
While most Indian IT majors are registered locally, only Infosys and Wipro are also listed on the New York Stock Exchange, while TCS delisted its shares from foreign exchanges a few years ago.
Dalal said the process of a primary offering and a secondary listing by an overseas company in India was complex and involved multiple stages of regulatory approval.
“We view this as a long-term project. While no decision has been made and any offering or secondary listing would be subject to market and other factors, we continue to assess and review the idea and are committed to acting in the best interests of our shareholders,” he said.
India remains key talent base
Although nearly 90 per cent of Cognizant’s revenue comes from the US and Europe, over two-thirds of its workforce is based in India, making it a core operational hub for the company.
Cognizant added 6,000 employees in the third quarter, taking total headcount to 349,800, and plans to hire 20,000 freshers in 2025, up from 9,000 the previous year.
Dalal said the company remains focused on strengthening its India workforce pipeline and expanding its delivery centres to support global operations.