Indian IT companies to increase acquisition spending to $6.5-7 billion this year

Indian Information Technology (IT) services companies are poised to significantly increase their acquisition spending to an estimated $6.5-7 billion this year, strategically targeting Cloud, data, enterprise platforms, and AI to drive revenue growth amidst a challenging economic landscape.

Indian Information technology (IT) services companies are expected to remain in an active acquisition mode this year too as they look to boost revenue through that route in a weak economic environment where organic growth remains challenging.

The large and mid-tier companies are expected to spend $6.5-7 billion between January and December, up from $5 billion last year, according to data from consultancy firm UnearthInsight.

The total number of such deals is expected to hit 30-35, up from 25 in the same period last year.

Strategic Focus Areas for Acquisitions

Most of these acquisitions will be in the Cloud and data verticals, enterprise platforms, and artificial intelligence (AI), agentic AI and analytics, Gaurav Vasu, founder and chief executive officer (CEO) of UnearthInsight said.

For example, Infosys earlier this week made one of its biggest acquisitions to date with the purchase of Optimum Healthcare IT, an American health care technology consulting company for $465 million in cash to deepen its focus on the health care sector, which is expected to be positively impacted by AI.

It also bought Stratus, a technology solutions provider for the property and casualty insurance business, for $95 million in cash.

"We note that the above two acquisitions and Versent (which is pending closure due to regulatory approvals) could contribute 225 bps to Infy's revenue growth in FY27 (assuming entire 12 months of contribution).

"We think these acquisitions will help Infy get access to new clients and augment its capabilities in lifesciences and healthcare verticals (mainly from Optimum's acquisition)," Nomura wrote in a note on Thursday.

Infosys' largest acquisition was in 2024, when it bought German engineering R&D company in-tech for about $480 million to deepen its foothold in the country's automotive industry.

It also bought Lodestone, a Zurich-based management consultancy firm, for $350 million in 2012.

Major Players and Their Acquisition Spends

In FY26, the Bengaluru-based company invested a total of $808 million for acquisitions.

This is one of the highest spends by the company on its inorganic strategy in the recent past.

India's largest IT services player Tata Consultancy Services (TCS), which has never been aggressive on mergers and acquisitions (M&As), spent an estimated $773 million in FY26.

Similarly, HCLTech spent a total of $420 million in FY26 on acquisitions, and Wipro spent $375 million on the acquisition of Harman DTS unit.

However, the largest acquisition by an Indian tech firm was done by midcap Coforge.

The firm acquired Encora for $2.35 billion. Among the international firms, acquiring Indian firm was Paris-based Capgemini's acquisition of BPM firm WNS for $3.3 billion.

Accenture, which has traditionally been the most aggressive on acquisitions, continued its move and recently announced the acquisition of UK-based applied AI company Faculty to beef up its capabilities.

"Accenture is staring at a structural problem that it cannot solve by hiring more consultants or rebranding existing practices.

"The traditional services model, large teams, repeatable work, advice over execution, is being compressed by the very technology Accenture is supposed to help clients adopt, and Wall Street is placing diminishing value on services firms failing to reinvent themselves on software-led services with a Future-Deployed Engineer (FDE) delivery focus," Phil Fersht, cofounder and CEO of HfS Research said.

Geographical Distribution of Acquisitions

Most of the acquisitions are in the US, which houses the maximum number of AI native companies due to access to capital and a well-oiled ecosystem.

About 52 per cent of last year's acquisitions are targeted there reflecting proximity to large enterprise clients, hyperscalers, and high-value digital and engineering programs.

Europe (19 per cent) and Australia (14 per cent) act as selective capability hubs, driven by engineering research and development, cybersecurity, and Cloud-specialist talent rather than scale expansion.

India and West Asia acquisitions are tactical, focused on delivery infrastructure and sector-specific digital needs.