Blackstone pledges all its Mphasis shares to raise $700 million and refinance loan

Blackstone has committed its entire 30.55% stake in Mphasis Ltd and raised an estimated $700 million to refinance a loan taken to finance the private equity firm’s acquisition of the India-listed IT services company, an executive said.

The direct pledge of all of Blackstone’s shares in Mphasis is probably the first example of an IT services company owner using its shares as collateral for loans.

Singapore-based promoter BCP Topco IX Pvt Ltd, a Blackstone-owned entity, has borrowed from a group of nine banks (Citibank, Barclays, HSBC, Deutsche Bank, JPMorgan, Morgan Stanley, BNP Paribas, MUFG and Nomura).

Each of these banks is represented by Catalyst Trusteeship Ltd, which told the stock exchanges on Tuesday that it would hold and manage Mphasis shares on their behalf.

“Blackstone’s existing lien on its shares Emphasis It relates to the refinancing of pre-existing procurement financing in the project owner organisation. As part of this routine refinancing transaction, the previous indirect pledge on Mphasis shares is being replaced by a direct pledge on Mphasis shares held by the promoter entity,” an Mphasis spokesperson said.

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Under a 2021 deal with three dozen global banks, Blackstone raised $1.1 billion, owning about 55% of Mphasis. Later, BCP Asia (SG) Mirror Holding Pte Ltd, the holding company of BCP Topco, pledged its assets to banks for the transaction, making it an indirect pledge and Mphasis shares were not put up as direct collateral. Therefore, Mphasis did not have to explain his supporter commitment.

This time, BCP Topco required the statement to be made by showing its entire 30.55% stake in Mphasis as collateral.

Blackstone acquired a 60.4% stake in Mphasis from Hewlett Packard Enterprise in September 2016 and has reduced its stake by selling shares three times over the past decade: in 2018, 2024 and 2025.

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Collateral value

Mphasis did not provide details of the amount collected by BCP Topco. However, debtors can increase at least 50% of the collateral value of the asset.

Mphasis’s market cap on Tuesday was as follows: ₹42,380 crore, implying that Blackstone’s 30.55% stake is approx. ₹13,000 crore and could have at least borrowed ₹6,500 crore ($700 million), according to an executive.

Blackstone’s use of stock as collateral to borrow money is a common practice among private sector firms; It comes as shares of IT services companies collapse as foreign investors grow uneasy about the future of the $315 billion outsourcing sector in the age of artificial intelligence.

The country’s 15 largest stocks IT services companies There has been a decrease of between 20 percent and 40 percent since the beginning of the year. Mphasis shares have lost 20.4 percent of their value since the beginning of the year.

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Mphasis, the nation’s eighth-largest IT services company, posted a 7% increase in revenue to $1.8 billion last year, despite business-related questions from its top accounts, including FedEx; This was the fastest increase in the last three years.

Margins remained at 15.3%, unchanged from the previous year. Last month, incumbent CEO Nitin Rakesh was granted a third, five-year term.