India's tech M&A market is at a three-year high, with $29 billion in deals

India Tech M&A Hits Three-Year High in 2025 as Consolidation Accelerates

India’s technology mergers and acquisitions (M&A) activity touched a three-year high in 2025, with total deal value expected to reach $26–29 billion, up about 30% from $20 billion in 2024, according to exclusive data shared by EY.

Deal activity has rebounded strongly from 2023 levels of around $5 billion and is now approaching the post-Covid peak of $33 billion seen in 2021–22. However, experts say the current M&A cycle is different, as it is driven mainly by vendor consolidation rather than digital capability expansion.

The consolidation wave is being fuelled by slowing organic growth and disruption caused by AI, pushing companies to acquire scale at more attractive valuations. “2025 is shaping up as a reset year,” said Shivani Nagpaul, partner – TMT investment banking at EY, adding that IT services companies are under pressure to reinvent themselves for the AI era.

This shift is reflected in deal sizes. In 2025, there have been 15 deals valued above $500 million, compared with only five such deals in 2024. Strategic buyers are leading these large transactions, signalling deeper industry consolidation.

Some of the major deals this year include:

• Capgemini’s $3.3-billion acquisition of WNS, one of the largest tech services deals of 2025

• TCS’s $700-million acquisition of Coastal Cloud, its biggest deal in nearly a decade

• HCLTech’s three acquisitions in December

• Coforge’s $2.35-billion purchase of Encora, its largest acquisition so far

According to Phil Fersht, CEO of HfS Research, the industry is moving toward a services-as-software (SaS) model, where services are delivered through software platforms, AI agents and automated workflows instead of large human teams. Mid-tier IT firms such as Mphasis, Persistent Systems, Virtusa, CitiusTech, Altimetrik and Ascendion are increasingly using M&A to acquire scarce digital engineering and AI capabilities.

Fersht expects more large, equity-heavy deals in 2026, as competition for skilled engineering talent intensifies.

Looking ahead, experts say M&A momentum is likely to continue into 2026, supported by IT services consolidation, innovation-led growth and the need to scale managed services. At the same time, private equity investments made during 2021–22 are nearing exit timelines, creating additional deal supply.

Nagpaul said AI is reshaping demand as software companies such as Salesforce, Microsoft and Databricks embed AI deeply into their platforms. This shift is forcing IT services firms to offer consulting, automation and governance capabilities at scale. At the same time, clients are pushing for higher productivity and cost efficiency in traditional “run-the-business” work, further driving consolidation across the sector.