M&A deals signal growth in India’s AI sector

Hello,

This week we’re seeing AI, disinvestment, and consolidation define India’s capital moment.

Case in point: Capgemini’s $3.3 billion acquisition of WNS, a definitive sign that generative and agentic AI are becoming boardroom priorities (we explore this in detail under the Market Trends section).

Meanwhile, in public markets, Jio BlackRock’s $2.1 billion fund debut hints at a brewing price war in India’s asset management business, making fund fees, not just fund performance, a competitive moat. 

Together, these moves suggest India’s capital flows are shifting decisively from growth capital to control plays, from VC gloss to strategic scale.

In healthcare, Temasek-backed Manipal Hospitals has acquired a majority stake in Maharashtra-based Sahyadri Hospitals, continuing the consolidation wave in the sector. 

And finally, Asian Paints’ full exit from rival Akzo Nobel India suggests a broader trend: listed firms are cleaning up balance sheets and doubling down on core strengths. 

Across the board, strategic exits, institutional scale-ups, and public–private crossovers are giving India’s capital ecosystem a quieter, but firmer, shape.

I hope you enjoy this week’s roundup, and please do connect with me on LinkedIn to find out how I can help with your next M&A deal.

Let’s dive in.

How AI agents are reshaping M&A

Artificial intelligence (AI) agents have huge potential to make deal processes faster and more efficient. But how do you separate the tangible use cases from the marketing hype?

On July 16, we’re hosting a webinar with Ideals and Comparables.AI to look at how dealmakers are using AI to gain a competitive advantage and how these use cases will develop in 2026. 

Deal Tracker

Our weekly roundup of confirmed M&A deals in India.

Market Trends

No small change

India’s AI sector may no longer be underestimated as a sunrise sector, though in terms of compute power the country is still a minnow. 

Deal activity in the last 18 months indicates a course quite different from the typical startup trajectory in other sectors. AI is an investment thesis for serious, strategic capital, a high-conviction play that global funds are beginning to treat with the same seriousness they once reserved for oil, telecom, and semiconductors.

Look at the big-ticket consolidation, infrastructure build-outs, and industrial alignment taking place. It is BIG money in motion as recent deals and MoUs indicate. 

The image below tells us where the smart corporates are putting their cash, prioritising AI capabilities across verticals like healthcare and banking, and placing bets across data and analytics with GenAI not far behind. 

Indeed, sovereign-aligned funds and pension capital are circling the foundational layers of India’s AI stack:

• NIIF, Digital Edge & AGP have partnered to build a $2 billion hyperscale data centre in Navi Mumbai (Bombay), part of a pan-India strategy
• Last year, Singapore’s ASMPT and Tata Electronics signed an MoU for high-end semicon equipment, strengthening the chip ecosystem under the India Semiconductor Mission, a domestic policy effort.
• HCL and Foxconn’s JV, with $445 million in government support, will set up an OSAT (outsourced semiconductor assembly and test) in Delhi NCR. 
• Large industrial house L&T Semiconductor’s MoU with C‑DAC (Centre for Development of Advanced Computing, an Indian government concern) aims to commercialise homegrown VEGA processors, linking public R&D with private industrial scale-up. 

Consolidation overtakes innovation

In a business process outsourcing (BPO) reset, AI-led platform consolidation is now overtaking incremental innovation in those services: just this week, French consultancy Capgemini acquired Indian BPO WNS for $3.3 billion, a move that signals that agentic AI is more than a buzzword and will become core to BPM (business process management) strategy.

To push the assertion further, there is Japanese SoftBank, long associated with tech VC, exploring direct buyouts in AI-led BPO and IT services, indicating a pivot toward modernising India’s legacy outsourcing stack.

High-value hardware and semicon facilities are now AI enablers, and crucial compute assets seem to be emerging.

For instance, India-US Shakti fab, a joint initiative between Bharat Semi and the US Space Force, aims to produce power electronics, photonics (a branch of optics that involves the manipulation of light), and sensor materials.

Tata Semiconductor’s $3.6 billion greenfield facility in Assam, a state in eastern India, will be the country’s first domestic chip assembly and test plant.

India joins global AI league (almost)

The country now ranks fifth globally in AI startup funding, with $3.24 billion raised in 2022, signalling that international capital views the country as more than a back office, it’s a growing hub of scalable, strategic AI investment.

Market growth, capital depth

The Indian AI market is projected to reach $17 billion by 2027, growing at 25-35% CAGR in both corporate spending and talent. This structural growth is precisely the traction institutional investors seek.

Global AI investment stood at $252 billion in 2024, with $33.9 billion in generative AI alone, suggesting the capital intensity of the sector. AI is now a high-stakes, billion-dollar bet – one increasingly mirrored in India’s M&A landscape.

With sovereign funds, global strategics, and long-term institutional capital in play, this is a moment of infrastructure-building, not ideation, as the country’s tech outgrows the startup narrative. The many deals mentioned above reflect this, and more importantly it seems, big money demands it.