BENGALURU: It is, in many ways, a captive centre redux. Buy the captive, win the bigger deal. That is increasingly becoming a playbook for Indian IT companies, which are acquiring client technology units and specialised businesses to anchor much larger, long-term partnerships.But the trend has also revived an old debate: are these deals about acquiring capabilities or simply adding to their capacity? The strategy is driven partly by the need to grow contract values as organic revenue expansion slows for Indian IT companies and artificial intelligence reshapes traditional technology spending. Acquisitions that bring next-generation capabilities in areas such as cloud, data, and AI can command valuations of three to four times revenue, while captive carve-outs are often valued at less than half those multiples.TCS, for instance, is acquiring Porsche’s technology subsidiary MHP for $373 million as part of a five-year strategic partnership worth $1.4 billion. MHP had revenue of about $865 million in 2025. Earlier this year, Wipro agreed to buy Singapore-based Olam Group’s digital arm for $375 million alongside a deal with a total contract value expected to exceed $1 billion, including about $800 million in committed spending.
The strategy is driven partly by the need to grow contract values as organic revenue expansion slows for Indian IT companies and artificial intelligence reshapes traditional technology spending
HCLTech recently agreed to pay $225 million for HPE’s Communications Technology Group, gaining IP, engineering talent, and customer relationships that strengthen its telecom business. Infosys acquired Danske Bank’s 1,400-person IT centre in India while securing a $454-million contract.Ramkumar Ramamoorthy, partner at tech growth advisory firm Catalincs, said, “The recent acquisitions of the in-house technology arms of Porsche, Guardian Life, Olam, and Telstra are a precursor to what will happen to GCCs that are considered a non-core asset by the parent. This is a redux of what happened many years back when similar captive arms of leading global companies such as Citigroup, Mitsubishi, UBS, Unilever, BASF, Deutsche Telekom and American Express were acquired by IT services and BPM companies.”The strategy is not entirely new. In 2008, TCS bought Citigroup’s stake in Citigroup Global Services, its India-based business process outsourcing captive, for $505 million. In 2009, Cognizant acquired UBS India Service Centre, the Hyderabad-based captive service provider to UBS.Peter Bendor-Samuel, founder and chairman of the Everest Group, said, “Porsche is facing brutal competition from China and increased tariffs in the US; hence it is restructuring, and this is part of that process. It is unclear how much TCS will benefit from this partnership outside of Porsche.”
