Indian IT companies like Infosys, Wipro, and HCLTech are increasingly turning to mergers and acquisitions (M&A) to expand into specialized areas such as Generative AI (GenAI) and engineering research & development (ER&D) due to limited organic growth opportunities in the global market.
Industry experts anticipate a surge in M&A activities. Notable recent deals include Cognizant’s acquisition of Belcan for $1.3 billion and Infosys’ purchase of Germany’s In-Tech for $480 million. Despite the disparity in deal valuations, these acquisitions underscore the growing trend.
HCLTech recently acquired the assets of Communications Technology Group from HPE to enhance its telecom capabilities. Wipro acquired a 60% stake in Aggne Global to strengthen its presence in the insurance sector. Additionally, Infosys’ acquisition of InSemi, a semiconductor provider based in Bengaluru, aims to boost its AI and ER&D offerings.
The momentum extends to mid-sized companies like Coforge and Happiest Minds Technologies, which are actively engaging in acquisitions to enhance their sector expertise. For instance, Coforge’s acquisition of Cigniti Technologies is expected to significantly improve its operating margins by FY27. Happiest Minds Technologies acquired Noida-based digital engineering firm PureSoftware Technologies to bolster its capabilities in BFSI, healthcare, and life sciences. ITC Infotech’s buyout of Blazeclan Technologies aims to enhance its multi-cloud and hybrid cloud services. Other notable acquisitions include LatentView Analytics’ purchase of Decision Point and Datamatics’ acquisition of Dextara Digital, reflecting the ongoing trend of consolidation and strategic growth in the IT industry through niche sectors.
Experts, including Phil Fersht of HFS Research, predict a rise in M&A activities in the coming year, particularly in sectors that can generate additional revenue. IT firms are expanding their service offerings and profitability by acquiring companies that focus on niche segments, allowing them to quickly tap into specialized skills, knowledge, and technology, while building robust client relationships. According to K.S. Viswanathan, vice president (Industry Initiative) at Nasscom, these firms are now better prepared to address the growing demand for enhanced AI and product engineering capabilities, ensuring they can meet client needs for more flexibility and accountability in service delivery.
Even smaller M&A deals, such as Happiest Minds’ acquisition of US-based digital product engineering company Aureus Tech Systems for $8.5 million to strengthen its engineering capability, and IT company Aurionpro Solutions’ acquisition of Mumbai-based AI startup Arya.ai for $16.5 million to enhance its enterprise fintech offerings, aim to facilitate the responsible, accurate, and auditable adoption of AI.
 to expand into specialized areas such as Generative AI (GenAI) and engineering research & development (ER&D) due to limited organic growth opportunities in the global market.){kind=link}