New Delhi — Nearly half of the acquisitions made by India’s top 26 information technology companies over the past two fiscal years were driven by artificial intelligence and related technologies, according to a report released Monday.
Crisil Ratings said capability-focused deals, many involving limited debt, are expected to keep the credit profiles of acquiring companies resilient.
The ratings agency said AI has increasingly become a central acquisition strategy as clients move from pilot projects to enterprise-scale deployment and technology providers seek to quickly expand their capabilities in AI, cloud computing, data engineering and specialized industry services.
“The objective is not merely to add scale but also to enhance relevance through specialist talent, domain-ready platforms, marquee clients and sharper go-to-market capabilities,” said Aditya Jhaver, Director at Crisil Ratings.
Jhaver said acquisitions can reduce the time needed to build new capabilities from years to months, helping technology companies remain competitive during a rapidly evolving technology cycle.
Crisil examined nearly 90 merger and acquisition deals. Earlier transactions were largely focused on expanding digital capabilities such as cloud computing, process automation and analytics, as well as entering new geographic markets.
Over the past two fiscal years, however, AI and related areas including data engineering, digital engineering, engineering research and development, and enterprise platforms have become the dominant reasons for acquisitions.
The shift comes as weaker discretionary technology spending, pressure on traditional IT services and growing demand for AI-driven transformation push companies to strengthen their portfolios, deepen industry expertise and acquire specialized platforms and talent.
“Importantly, this inorganic push has not materially weakened balance sheets. Most transactions have been funded through internal accruals, cash reserves or share swaps, with limited reliance on debt, preserving financial flexibility even as companies reposition for an AI-first demand cycle,” Crisil said.
Most acquisitions during the past two fiscal years involved overseas targets, with more than 70% located in the United States and Europe. Crisil said those markets offer larger pools of AI talent, proprietary technology platforms and industry-specific intellectual property. (Source: IANS)
