Cognizant Weighs India IPO to Tap Premium Valuations of Local IT Giants

Teaneck, New Jersey-based IT services giant Cognizant is in the early stages of assessing a potential primary offering and secondary listing in India with its legal and financial advisers. The announcement was made during the company’s third-quarter earnings call on Wednesday.

The Nasdaq-listed IT major was founded in Chennai in 1994 and went public in New York four years later. Like its Indian peers, the company derives the majority of its revenue from US-based clients, but its largest workforce is located in India.

“Cognizant’s Board and management team regularly assess opportunities to enhance shareholder value. Towards this end, we have been evaluating a potential primary offering and a secondary listing in India with our legal and financial advisers,” CFO Jatin Dalal told analysts on October 29.

He added that the consideration is part of a comprehensive review, which remains 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. The process of a primary offering and secondary listing in India by an overseas company is complex and involves multiple steps. We view this as a long-term project,” Dalal said.

He further clarified that no decision has yet been made, and any offering or secondary listing would be subject to market conditions and other factors.

If listed in India, Cognizant would become the third IT services company to have shares traded in both India and the US, after Infosys and Wipro.

Context: Dalal’s comments came in response to a question about Cognizant’s market valuation. Yogesh Aggarwal from HSBC Global Investment Research noted that although Cognizant’s performance has improved steadily over recent quarters, its stock continues to trade at a significant discount compared to other major IT firms.

In terms of market capitalisation, Cognizant, led by CEO Ravi Kumar S, currently ranks fifth among major IT services firms. It is valued at around $35 billion. In comparison, TCS commands a market capitalisation of about $125 billion, followed by Infosys at $70.5 billion and HCLTech at $47.9 billion.

Cognizant Beats Estimates in Q3

Cognizant on Wednesday reported a 53% year-on-year drop in net income for Q3 2025 to $274 million, hit by a one-time, non-cash tax expense of $390 million. Despite this, revenue rose 7.3% year-on-year to $5.42 billion, beating Bloomberg’s analyst estimate of $5.32 billion, driven by strong gains from AI-focused investments.

The company also added 6,000 employees, mostly freshers, taking its total headcount to 349,800.

Following the strong results, Cognizant raised its full-year revenue forecast to between $21.05 billion and $21.1 billion, implying annual growth of 6.6%–6.9%. This marks the third consecutive guidance upgrade this year.

However, management remained cautious about the demand outlook, citing visa constraints and shifting US tax policies that have slowed discretionary technology spending.

“With respect to the demand environment, trends in Q3 were consistent with the last quarter. Clients across industries are navigating elevated levels of uncertainty around trade policy and its impacts on their businesses,” Dalal said.

He added that clients are carefully evaluating technology investments, leading to a slower pace of discretionary spending in areas such as products and resources.

“At the same time, cost pressures continue to spur demand for productivity-led initiatives and vendor consolidation opportunities across segments. We also see a growing pipeline of modernisation projects that lay the foundation for AI-led transformation for our clients,” he said.