IT large caps back on acquisition track to boost skills, footprint

India's leading software services companies have accelerated their acquisition activity after a two-year lull.

Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra together made seven acquisitions so far in 2025, up from five in 2024 and just two in 2023, according to Tracxn data.

The tally included TCS' purchase of ListEngage for $72.8 million; three by Infosys including a 75% stake in Verset for $153 million, The Missing Link for $98 million, MRE Consulting for $36 million; HCLTech's buy of Nuance for $15.6 million, and the largest of all - Wipro's acquisition of Harman's Digital Transformation Solutions (DTS) business unit for $375 million.


The deals mostly covered capability-driven areas such as AI, software products and engineering services, industry experts said, while the companies also focused on expanding their geographical footprint.

Notably, engineering services have been a key area of acquisitions in the last two years, analysts said, as companies continue to focus on growing their service capabilities.

For instance, Infosys acquired in-tech for automotive engineering, and InSemi for semiconductor engineering in 2024; Wipro took over Harman's DTS business unit in 2025, while HCLTech bought ASAP Group in 2023.

"Engineering was the one sector where there were several acquisitions across the sector as the companies required more capability. So, it is a growing market now," said Pareekh Jain, founder and chief executive of IT research firm EIIR Trend. "Companies do it either to develop a capability or to develop a geographical footprint."

Yugal Joshi, partner at US-based consultancy and research firm Everest Group noted that "the macroeconomic condition is such that acquiring assets now is more viable."

The acquisition count however trailed the 17 and 16 companies bought by the five top IT firms in 2021 and 2020 respectively. Tech Mahindra, Wipro, and HCLTech were the most aggressive in buyouts. While Tech Mahindra bought 11 companies in 2021, Wipro and HCLTech each acquired four in 2021 and 2022 respectively.

Analysts are also pointing to a shift in capital allocation priorities, with large-cap IT firms focusing on smaller, capability-driven "tuck-in" acquisitions.

"The pattern emerging in the large cap is that they are acquiring ER&D players," said Karan Uppal, vice president and lead analyst for IT services at Phillip Capital.

Smaller acquisitions help in acquiring capability besides clients for IT firms. For instance, In-tech, acquired by Infosys, was already working with several German OEMs including Daimler.

Yet, Indian companies are unlikely to bet on long-gestation areas such as quantum computing, preferring "here and now" acquisitions with immediate impact. "I don't think Indian providers have that kind of an appetite to bet on such a long term," said Joshi.