Each of the top six Indian software services firms-TCS, Infosys, Wipro, Satyam, HCL Technologies and Cognizant-have cash reserves in excess of $500 million, with Infosys topping the list at $1.8 billion.This gives these firms flexibility to invest in newer opportunities including M&A possibilities.

Mid-tier companies are also looking to leverage their cash reserves for M&A opportunities. Patni Computer Systems, with around $270 million in cash, is one such company that's eyeing M&A opportunities.

Many other mid-tier companies might look at smaller acquisitions for topline growth. Typically around 10-12% of a company's topline translates into cash reserves for the IT companies. Source: Economic Times