Indian IT Firms Spend $5.5B on AI Acquisitions

Indian IT Firms Boost AI with Premium Acquisitions

Indian IT services companies significantly increased their investment in artificial intelligence and engineering capabilities during FY26, paying premium valuations for acquisitions. This strategic shift prioritizes building specialized capabilities, intellectual property, and platforms over mere revenue or headcount expansion.

Key Investment Figures

• Total investment: $5.5 billion across 19 acquisitions in FY26.
• Primary goal: Building specialized capabilities, IP, and platforms.
• Capability-led transactions: 12 deals accounted for $4.7 billion, commanding higher revenue multiples.
• Scale-driven deals: 5 deals valued at approximately $400 million.
• Coforge led in deal value with $2.35 billion, largely due to its acquisition of Encora.
• Infosys and HCLTech completed the highest number of transactions.
• Dominant region for acquisitions: North America, representing 68% of deals.

Strategic Shift Driven by Client Demands

This strategic shift is driven by the need to adapt to evolving client demands and pressures on traditional business models due to increasing AI adoption. Hexaware’s CFO, Vikash Jain, confirmed the company’s focus on capability-led deals.

Outlook: More AI Deals Ahead

The trend is expected to continue into FY27. UnearthInsight forecasts around 22 acquisitions worth $6 billion, driven by demand for AI, data, engineering, and digital transformation. Global examples like HCLTech’s strategic stake in Sarvam AI and SpaceX’s acquisition of Cursor underscore the high valuation of AI capabilities.