M&As on the rise as tech companies focus on top line growth

Consolidation in the mid-tier IT and ITeS segment is on the rise as companies are increasingly chasing top line growth in a globally sluggish software services market. Moreover, attractive valuations of these firms are prompting promoters and investors to exit their portfolios at multiple-times gains, leading to more M&A activities.

In the last couple of months, the IT and BPO space has seen a big uptick in M&A activities, with companies merging with other entities to become bigger players, or private equity players buying a controlling stake in mid-tier IT firms with the hope of cashing out investments for better returns.