Indian IT Companies Need AI Skills Fast. Is M&A the Answer?

Indian IT companies are increasingly using acquisitions to build their artificial intelligence (AI) capabilities as demand for AI services grows. At the same time, companies are also reskilling their existing workforce to prepare employees for changing technology needs.

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Alongside internal training and hiring, acquisitions are helping firms gain specialised employees, technology and experience faster.

According to a Crisil Ratings analysis, nearly half of the M&A deals by India’s top IT companies over the past two financial years were related to AI and other technology capabilities. The analysis covered around 90 deals involving 26 leading IT companies.

The deals were not limited to AI. Data engineering, digital engineering, engineering research and development (ER&D), and enterprise platforms were also among the areas attracting buyers.

Also Read: Wipro Adds AI Agent iSkill to Help Learning for 2.4 Lakh Employees

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Crisil said AI has become a key reason for Indian IT companies to make acquisitions. Buying an existing business can help companies build new capabilities in months, instead of taking years to develop them through hiring and training.

TCS, Infosys, Wipro and Coforge Among the Buyers

Recent deals show how Indian IT companies are using acquisitions to add new skills and technology.

• Coforge: Its acquisition of Encora was valued at about $2.35 billion. The deal adds digital engineering, data and AI capabilities, along with a large pool of technology professionals.
• TCS: TCS acquires Coastal Cloud for $700 million. The US-based company works on Salesforce consulting and cloud services and adds capabilities that TCS can use for AI-led projects.
• Infosys: Infosys acquired Optimum Healthcare IT for $465 million, adding healthcare technology expertise and specialist employees.
• Wipro: Wipro acquired HARMAN’s Digital Transformation Solutions business for $375 million, adding more than 5,600 employees and strengthening its engineering and digital capabilities.

These deals have different business goals, but they show a common trend. IT companies are looking to get access to specialised skills and technology quickly rather than depending only on fresh hiring and internal training.

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Why This Matters to HR

This shift directly impacts HR teams.

Hiring is no longer only about filling open positions. An acquisition can bring hundreds or thousands of employees with specific skills into a company at once. This can help IT firms enter new areas where experienced professionals are difficult to hire.

But getting the people is only the first step. Keeping them after an acquisition can be harder. Senior engineers, technology specialists and other key employees may leave if they are unhappy with changes in leadership, pay, roles or working practices.

This makes employee retention an important part of any technology acquisition. Companies also need to explain what will happen to employees, their roles and career paths after the deal.

Integration is another challenge. A smaller technology company may have a very different work culture from a large IT services company. Bringing the two organisations together without losing the skills and people that made the company attractive in the first place will require careful planning.

At the same time, acquisitions cannot replace employee training. Existing employees will continue to need new skills as AI changes technology jobs. Training in AI, data, cloud and digital engineering will remain important even for companies that are buying these capabilities through M&A.

More than 70% of the companies acquired in the deals covered by Crisil were based in the US and Europe. This gives Indian IT firms access not only to technology but also to specialist talent and industry knowledge in overseas markets.

For HR, the message is simple: the AI skills race is changing how companies hire. IT firms are still recruiting and training employees, but M&A is becoming another way to get the skills and teams they need quickly.