Amid rising economic challenges and shifting client demands, Indian IT companies are increasingly acquiring global capability centres to secure long-term revenue, gain specialised expertise, and transition into higher-value services, signalling a significant shift in industry consolidation efforts.
Indian IT services firms are increasingly looking beyond organic expansion and using acquisitions to find growth, with global capability centres emerging as a favoured target. According to Business Standard, this shift reflects weak macroeconomic conditions, volatile geopolitics and pressure on margins, all of which have made steady top-line growth harder to achieve through traditional client work alone. The appeal of these deals lies in their size, their established client relationships and the chance to move into more specialised, higher-value work.
Several recent transactions illustrate the trend. Tata Consultancy Services has bought the GCC operations of Best Buy, HCLTech acquired Guardian Life’s GCC and Wipro agreed to take over Mindsprint, the technology arm of Olam Group. The Financial Express reported that Wipro’s deal is valued at $1 billion over eight years, while other reporting put the Best Buy transaction at about ₹2,000 crore. For buyers, these arrangements can lock in longer-term revenue, while the sellers gain a way to address units that have stalled or struggled to scale.
That matters because many captive centres have not developed into the strategic hubs their parents had hoped for. Business Standard said some have been held back by shifting corporate sponsorship, a tendency to view them as cost centres rather than growth engines, weak local leadership and staffing increases that were not matched by specialist skills. Research cited by the publication from Embark and UnearthIQ suggests that around 30% of GCCs established since 2021 have plateaued, which would amount to roughly 150 centres over the past five years, with more than 500 centres failing to reach their full potential.
Industry specialists say the attraction for IT vendors goes beyond simple scale. Phil Fersht, founder and chief executive of HFS Research, told Business Standard that AI is putting pressure on traditional effort-based contracts and prompting customers to demand more output for less money. He argued that buying an established centre with a multi-year relationship can give providers better revenue visibility, while also bringing in domain knowledge, intellectual property and staff who already know the client environment. Pareekh Jain, chief executive of EIIRTrend, described the trend as a form of long-term consolidation that can improve productivity and support wider client mining.
The shift also reflects how sharply the market has changed since GCCs first became a competitive threat to outsourcing providers. Between 2015 and 2020, many corporations used them to bring technology work in-house, reducing demand for external services. That pressure has not gone away, but Indian IT firms are now trying to respond with their own GCC offerings, including greenfield set-ups and build-operate-transform-transfer models. Business Standard noted that TCS has created a dedicated Global Value & Innovation Centres unit, Infosys has introduced an AI-first GCC model and Cognizant is also marketing similar services, although the same report said Indian IT firms still account for less than 15% of the greenfield GCC market. Ambit Capital, as quoted by Business Standard, warned that some such deals can lose value over time, pointing to earlier TCS transactions where annual revenue run-rates fell sharply over the life of the contract.
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