Mumbai: The country''s top information technology software firms Tata Consultancy Services Ltd (TCS) and Infosys Technologies are planning to acquire small firms to enhance their existing skills.

TCS said it is not keen to buy firms with a very large staff.

"We have to acquire capabilities we don''t have. That''s our strategy," S Padmanabhan, head, global human resources, TCS, told a business conference.

TCS, which has more than 1,00,000 employees, plans to hire 35,000 people in the current fiscal year ending March 2008.

"We don''t find any joy in acquiring a 40,000- or 50,000-people company. We are adding those many people ourselves," Padmanabhan said.

No 2 software services firm Infosys Technologies is also eying foreign acquisitions to access new markets and skills. But the company is vary of taking too much risk, Infosys CEO Kris Gopalakrishnan said

"Seventy per cent of acquisitions fail to deliver value, so you have to be absolutely sure of what you are doing," he said

Gopalakrishnan would not comment on specific companies, but said they would prefer deal sizes of up to $500 million.

"You want to look at something that''s less risky, that can be integrated quickly, and we definitely see the need to do smaller, strategic acquisitions to fill the gap in capabilities," he said.

There has been speculation recently linking Infosys to French computer consultancy Capgemini.

Other software majors like Wipro Technologies and Satyam Computer Services are also eyeing overseas acquisitions.

Meanwhile, foreign firms like IBM and Accenture are expanding in India, taking advantage of its large pool of low-cost and fast-growing economy.