M&A in IT sector remains lacklustre: IDC

Mergers and acquisitions activities in the IT space are expected to be on a lower pitch this fiscal as companies adopt a cautious approach in view of the uncertain domestic and global economic environment, according to global data firm IDC.

“This year is going to be relatively slow for merger and acquisitions in the IT space. Every one is in a cautious mood because of the euro—zone crisis. Caution is the watch word,” IDC (International Data Corporation) India country manager, Mr Jaideep Mehta told PTI here on the sidelines of a conference.

The companies like TCS may go for one or two buyouts in the space, he said, adding that “I doubt it is going to be a hugely active year from the M&A perspective“.

“However, what we have started seeing more and more is alliances with equity participation or indeed complete buyouts as companies move into new markets,” he said.

On the positive side, for many domestic companies, the frontier market is Latin America now. But queries from the African market beyond South Africa as well as some of the fringe countries in the Asia Pacific region like Vietnam are also increasing significantly.

The domestic IT market at present is no doubt going through a slow down, he said, adding, “What we have seen from the last quarter is that some of the segments have slowed down, while some segments continue to grow“.

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