India Tech M&As Hit a Three-Year High on Consolidation Push
Vendor consolidation, rather than digital expansion, drove dealmaking in 2025 as AI reshaped demand across technology services, an ET report said.
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[Image source: Chetan Jha/MITSMR India]
Mergers and acquisitions activity in India’s technology landscape rebounded in 2025, reaching its highest level in three years as companies increasingly pursued consolidation to counter slowing organic growth and the disruption triggered by artificial intelligence, The Economic Times reported, citing EY data.
Total deal value for the year is estimated at $26–29 billion, up from about $20 billion in 2024 and a sharp recovery from 2023, when tech M&A activity had fallen to roughly $5 billion.
While volumes remain below the post-pandemic peak of 2021 and 2022, when deal values crossed $33 billion, analysts said momentum has returned.
The current cycle differs from the post-Covid phase, when acquisitions were primarily aimed at adding digital transformation capabilities.
In 2025, deal activity has been shaped by vendor consolidation, as technology firms seek scale and operational leverage amid slower growth and changing client demand tied to AI adoption.
The shift is also visible in deal sizes. Fifteen transactions valued above $500 million were recorded during the year, compared with just five such deals in 2024, signaling a renewed appetite for large strategic acquisitions.
Several high-profile transactions illustrate the trend. Capgemini agreed to acquire Indian business process services firm WNS in a $3.3 billion deal, one of the largest technology services transactions of the year.
Tata Consultancy Services Ltd returned to large-scale acquisitions after a long pause with a $700 million purchase of Coats.ai Cloud, while HCL Technologies completed three acquisitions in December.
Mid-tier IT services provider Coforge announced its largest deal to date with the $2.35 billion acquisition of Silicon Valley-based Encora.
The deal activity reflects a broader transformation underway in IT services, as firms shift toward delivering offerings through software platforms, AI agents, and automated workflows, reducing reliance on traditional labor-intensive models, the report said, citing analysts.
Mid-sized services firms are increasingly using acquisitions to add specialized digital engineering and platform capabilities rather than simply expanding revenue, as competition intensifies and clients demand faster, more automated outcomes.
Looking ahead, analysts expect consolidation momentum to extend into 2026, supported by continued restructuring in IT services and an increase in private equity exits from investments made during the 2021–22 boom.
