Capitalizing on India's $150B Information Technology Industry

Infosys and Wipro Lead the Way in India 

The biggest IT companies in India include Wipro and InfoSys. According to CB Insights (an NY-based research enterprise), these companies have acquired 8 companies and invested in some 28 corporations. Between 2012 and 2017, Wipro has invested in 18 startups, and Infosys in 10. Other companies include Mphasis and Tech Mahindra – both of which have invested in 1 company apiece. Indian information technology companies on the top acquirers list include HCL with 5 startups, Wipro with 5 startups, Tech Mahindra with 4, Mindtree with 4, Larsen & Toubro with 3, Infosys with 3, Tata Consultancy Services and Mphasis with 1 each.

The trend among information technology companies on the subcontinent and numerous consultancies, is that back-office activities and tech outsourcing activities are shifting to overseas-based operations. IT companies across India are seeking new alliances and new business markets by increasing their M&A (mergers and acquisitions) and overall investment activity. They are desperate to boost innovation and dynamism in their enterprises, so as not to be left behind in the technology race.

According to Wilkins Finance asset finance manager, Joachim Mahendra, ‘… Indian innovation remains at the forefront of the local IT enterprise. The IT industry of India is dynamic, versatile, and able to absorb and adopt new technologies provided the opportunities are available and the impetus is there. The rationale behind acquiring startups is clear: Established IT enterprises can adopt new-age technologies as opposed to developing them in-house. Various companies have now created their own investment wings precisely for this purpose. They scout and monitor the markets for viable opportunities that have strategic value to Indian IT enterprises.’

Leading IT Companies in India

Many of the leading IT companies in India have created their own venture-capital divisions. These subunits of the company are responsible for closing deals with major international companies, including startups in Silicon Valley. Examples of recent acquisitions include Austrian Tricentis, US Drivestream, EmailAge, and German-based Cellent among others. Some Indian high-tech companies focus on early-stage startups and others focus on mature corporations. In total, some 3 million people are directly employed by the IT industry in India, with 10 million people indirectly employed. Most employment activity is provided by Infosys (156,700 employees) and TCS (275,000 employees).

IT in India stats are encouraging, despite some of the concerns plaguing the industry. It is one of the key sectors of the Indian economy, and in 2013 IT and subsectors accounted for 8% of GDP in India. This statistic rendered India’s IT sector the fifth most valuable component of GDP. However, by 2014 and 2015, annual revenues of $120 billion were generated in the IT industry in India. That is markedly higher than the $60 billion generated during the global financial crisis of 2008/2009. End-user expenditure in India in 2013 amounted to $67.4 billion, and by 2016 was $79 billion.Some 33% of all expenditure in 2016 was in devices (PC, Mac, iPhone, iPad and Android devices). Telecom IT expenditure made up another 33%, valued at US$29 billion.