Wipro Acquires Mindspring, Hints at Surge in Indian IT Mergers Amidst Slowing Growth

Indian IT Sector Sees Surge in Mergers and Acquisitions

The Indian IT sector is witnessing a significant surge in mergers and acquisitions (M&A) as companies turn to inorganic growth strategies to navigate a period of sluggish growth. The trend is exemplified by Wipro's $1 billion engagement with Olam Group and the acquisition of its IT arm Mindsprint, which highlights a broader shift in the sector.

Wipro's shares rose over 2 percent on the day of the announcement, making it the top gainer on the IT index. However, brokerage Emkay Global maintained its "Reduce" rating for the stock and kept the price target unchanged. The market's relief was understandable, as the deal offered a large, long-duration contract with a blue-chip client, domain-specific IP, and a captive delivery relationship.

The Wipro-Mindsprint Deal: A Broader Trend

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The Wipro-Mindsprint deal is not just a Wipro story, but rather the latest example of a wave of acquisitions reshaping Indian IT. Companies are spending aggressively to acquire capabilities that organic growth strategies alone cannot deliver fast enough. According to Shubham Rathore, Principal Analyst at Gartner, Indian IT services M&A is experiencing an early-stage structural revival rather than a series of one-off, opportunistic deals.

Deals Piling Up Across the Sector

Across the sector, the pace of acquisition has been striking. TCS spent $700 million on Coastal Cloud, an AI-led multicloud Salesforce consulting firm, which is already contributing to TCS's quarterly numbers. Infosys made two acquisitions in 2025 to strengthen its AI execution capabilities, acquiring a 75 percent stake in Versent for about $153 million and MRE Consulting earlier in April. HCLTech announced three back-to-back acquisitions in December alone, including the buyout of the Telco Solutions business of Hewlett Packard Enterprise for $160 million and Jaspersoft for $240 million.

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Mid-Cap Coforge Makes a Striking Move

The most striking move came from mid-cap Coforge, which acquired Encora, an AI-native firm with deep strengths across AI-driven engineering underlaid by cloud and data. The combined entity is expected to generate $2.5 billion in revenue by FY27, with approximately $2 billion derived specifically from AI-led engineering, cloud, and data services.

What Is Driving the Surge in M&A

The answer, according to analysts, is two pressures converging at once. The Indian IT sector slowed sharply to less than 4 percent in FY24 and has remained in the 4-6 percent range since, pushing firms toward inorganic options. At the same time, the rise of generative AI has created an urgent capability gap: clients are asking fewer questions about how many engineers a firm can deploy and more questions about what proprietary platforms and AI tools it brings to the table.

Rajesh Ranjan, Managing Partner at Everest Group, frames the dynamic precisely. Weak growth is the trigger, he says, but capability gaps are the driver. Trilegal's Abhishek Guha puts it similarly. "It is a combination of both to some extent. Some firms are looking to prioritize acquisitions that enhance capabilities in generative AI, data analytics, and cloud services to remain competitive. Others are looking at strategic acquisitions to cover AI's revenue impact."

A Structural Reset in Capital Allocation

According to Shubham Rathore at Gartner, Indian IT services M&A is experiencing an early-stage structural revival. We expect this elevated M&A activity to persist through 2026 as firms continuously reposition their portfolios to compete in an AI-first market.