India’s Tech M&A Surge: AI-Focused Consolidation Pushes Deal Value to 3-Year High in 2025

Focused by AI disruption and vendor consolidation, India’s tech M&A rebounded in 2025, deal values rising nearly 30%, paving way for larger 2026 acquisitions.

EY shows that technology mergers and acquisitions in India hit a three-year high in 2025, with a projected total deal value of 26 to 29 billion, up thirty percent from twenty billion in 2024. Deal activity has increased greatly since 2023, when tech M&A was valued at roughly five billion dollars. It is now approaching the thirty-three billion dollar overall deal value of the post-Covid boom of 2021 to 2022.

The current cycle, according to experts, is distinct and is primarily influenced by vendor consolidation rather than capability acquisitions after COVID, when companies were investing in opportunities for digital transformation.

AI disruption has slowed organic growth throughout this wave of consolidation, allowing companies to gain scale at lower, attractive costs. Deal size reflects the trend. There were fifteen transactions for over 500 million dollars this year, compared to only five in 2024. Strategics is driving large transactions signalling consolidation, Nagpaul stated.

One of the biggest tech services transactions of the year was Capgemini's 3.3 billion-dollar acquisition of Indian BPO provider WNS. With the 700 million-dollar acquisition of Coastal Cloud, Tata Consultancy Services ended a nearly 10-year gap on major acquisitions. In December, HCL Technologies completed three acquisitions. With the 2.35 billion acquisition of Silicon Valley-based Encora, mid-tier IT firm Coforge completed its biggest acquisition to date.

The trend, according to Phil Fersht, CEO of HfS Research, is a move away from large human teams and toward services-as-software (SaS) delivery models, which entail the delivery of services via software platforms, AI agents, and automated workflows.

Looking forward, it is anticipated that the impetus for M&A will continue in 2026 due to the expansion of managed offerings, innovation delivery, and additional consolidation of IT services. Large PE investments from 2021 to 2022 are also headed for exits. Both a market pull and a demand-side push are produced as a result.