India's tech M&A on a three-year high with deal value touching $29 billion

The surge

India's technology mergers and acquisitions hit a three-year high in 2025, with total deal value expected at $26–29 billion — up 30% from $20 billion in 2024. Deal activity has rebounded sharply from 2023, when tech M&A stood at about $5 billion, and is trending closer to the post-Covid boom of 2021–22 when total deal value reached $33 billion.

Consolidation, not capability

The current cycle is different from post-Covid deal-making. It is driven largely by vendor consolidation rather than capability acquisitions. Slowing organic growth due to AI disruption is helping companies acquire scale at lower, more attractive valuations.

"2025 is shaping up as a reset year. Large IT services players and digital natives face significant growth pressure and must repurpose for the AI era to meet evolving demand."— Shivani Nagpaul, partner – TMT investment banking at EY

Notable deals in 2025

This calendar year witnessed 15 transactions valued above $500 million, compared with just five such deals in 2024. Some highlights:

• Capgemini acquired Indian BPO service provider WNS for $3.3 billion — one of the largest tech services deals of the year.
• Tata Consultancy Services ended a nearly decade-long pause on large acquisitions with the $700 million purchase of Coastal Cloud.
• HCL Technologies made three acquisitions within December alone.
• Coforge sealed its largest acquisition to date — the $2.35 billion purchase of Silicon Valley-based Encora.

The shift to services-as-software

Industry observers describe the trend as a shift toward services-as-software (SaS) delivery models — where services are delivered through software platforms, AI agents, and automated workflows rather than large human teams.

Mid-tier firms like Mphasis, Persistent Systems, Virtusa, CitiusTech, Altimetrik, and Ascendion are approaching M&A not just to buy revenue, but to add scarce digital engineering capabilities and accelerate SaS delivery models. More large, equity-heavy deals are expected in 2026 as competition for engineering talent intensifies.

What's driving the momentum forward

• IT services consolidation: growth pressure and AI disruption are pushing firms to acquire rather than build.
• PE exit cycles: large private equity investments made in 2021–22 are moving toward exits, creating both demand-side push and supply-side pull.
• AI embedding: software vendors like Salesforce, Microsoft, and Databricks are embedding AI into their platforms, reshaping IT services demand and driving need for consulting, automation, and governance capabilities at scale.
• Productivity pressure: clients are demanding significant productivity gains on "run the business" work, pushing firms to protect their base through acquisitions.

What this means for Israeli tech firms

For Israeli companies with capabilities in AI, cloud infrastructure, cybersecurity, or semiconductor design, this M&A wave creates a compelling entry window. Indian acquirers are actively seeking technology assets that can accelerate their transition to AI-first delivery models. Strategic partnerships, joint ventures, or structured acquisitions with Indian tech firms offer a direct route to scale — backed by buyers who are already hungry for precisely the kind of innovation Israel excels at.

Bottom line

India's tech M&A market is in a consolidation-driven upcycle, with deal values approaching post-Covid highs. The shift from buying revenue to buying capabilities — particularly in AI, automation, and digital engineering — creates a rare alignment of interest between Indian acquirers and Israeli innovators. Companies that position themselves now stand to benefit from the most active M&A environment India has seen in three years.