R Systems Shares Surge 17% Today After Board Approves ₹400 Crore Acquisition of Novigo Solutions

New Delhi, August 22, 2025 – Shares of R Systems International Limited (NSE: RSYSTEMS, BSE: 532735) saw a sharp increase in its share price as the stock increased 17.33% in early trade today. The rally in the share price came after the company announced that it was going to acquire 100% equity in Novigo Solutions Private Limited. The deal for acquisition was approved by the Board on August 21, 2025.

Market Snapshot

As of 11:32 AM, shares of R Systems International Limited were trading at ₹473.10, up by 11.71%. The stock hit an intraday high of ₹496.90 and a low of ₹448.70 so far, with a traded volume of 119.04 lakh shares, translating into a traded value of ₹571.73 crore.

Deal Structure and Financials

The upfront consideration for the deal is set at ₹400 crore, which is to be paid upfront in cash. Apart from this, the consideration is also an additional stock component which is linked to Novigo’s FY26-FY27 EBITDA performance. The purchase price of the deal is calculated using EBITDA, where the consideration is about 6 times Novigo’s expected EBITDA for FY25. As Novigo’s adjusted EBITDA was at around ₹657 million, R Systems is paying 6 times of that.

After Deal Impact

The after-deal impact of the acquisition looks good for R Systems. Post-acquisition, the combined entity will report revenue of ₹20,619 million and EBITDA of ₹3,819 million, with an improved EBITDA margin of 18.5% compared to R Systems’ standalone margin of 17.6%.

Further, the deal is EPS accretive, which is a great thing for R Systems, as this means that after the acquisition, R Systems’ earnings per share will increase immediately, not decrease.

Management Commentary

The management of both companies showed optimism for the deal ahead. Nitesh Bansal, CEO & MD of R Systems, said, “This is a pivotal moment for R Systems, our clients, and investors. The acquisition accelerates our journey to lead the agentic AI revolution, combining automation depth with our OptimaAI portfolio for end-to-end execution under one roof.”

The same positive sentiment was expressed by Praveen Kalbhavi, CEO of Novigo Solutions, as they stated, “Joining R Systems accelerates our mission to deploy agentic AI and automation at scale. Our teams in Mangalore and other locations will complement R Systems’ global strengths.”

Investor Takeaways

The acquisition of Novigo Solutions marks a significant step for R Systems. It will strengthen its portfolio, especially in AI-driven automation and help the company expand its revenue base. As Novigo gets acquired, investors should:

Closely track the integration progress, as synergies between the two companies will determine long-term value creation.

Another factor that investors should watch is margin sustainability, as it could improve overall profitability if maintained.

Further, monitoring management’s execution on promised EPS accretion and whether the acquisition supports consistent cash flow growth is also crucial.

R Systems International Limited is a global IT-enabled services provider that specialises in products like engineering, data & AI, and cloud-native solutions. The company is headquartered in India, with its clients spread across the globe in North America, Europe, and Asia-Pacific. It was first listed on April 26, 2006, and since then has grown exponentially.

REF: https://www.bseindia.com/xml-data/corpfiling/AttachLive/8b1335c7-7f64-4588-9fe8-01612628812f.pdf

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