HCLTech has invested ₹1,427 crore or around $150 million in Sarvam AI to acquire 10.46% stake in the startup.
Sarvam AI’s Series B funding round
HCLTech was the lead investor in a roughly $300 million Series B funding round, which values the AI startup at around $1.5 billion.
Along with HCLTech, Nvidia, Prosperity7, Activate, Glade Brook invested around $100 million cumulatively, while Bessemer made a $50 million investment in the funding round. PeakXV and Khosla Ventures are among the early backers of Sarvam AI.
HCLTech’s Rationale To Back Sarvam AI
HCLTech will fund Sarvam AI’s research and development for training its next-gen frontier AI agentic, coding models and cybersecurity use cases, as well as access to compute at scale to expand its deployment across key industry verticals.
The investment will enable HCLTech to:
- Develop industry and client specific language models and AI solutions for its global client base, delivering compelling price-to-performance outcomes and enabling differentiated enterprise AI solutions across industries.
- Leverage and expand Sarvam’s multilingual AI capabilities in India and beyond India for both sovereign AI initiatives and enterprise deployments across global markets.
- Accelerate the development and adoption of sovereign AI solutions for governments, regulated industries, and enterprises seeking localised, secure and compliant AI deployments.
HCLTech CEO C Vijayakumar told CNBC-TV18 that he found the Sarvam team incredible and he thought it was an incredible platform. It said the investment will open a new chapter of opportunities for HCLTech and will help Sarvam grow as well.
He said Sarvam AI is the sixth big opportunity for HCLTech, which is sovereign AI. Everybody is looking to adapt AT across businesses and also wants control over it, he said. The enterprise market in India a big opportunity and that is what HCLTech is playing, he added.
Nomura says
Brokerage firm Nomura has a “buy” rating and a price target of ₹1,600 per share on HCLTech, an upside of 42.6% from its previous close.
It noted that this is the first of its kind investment by any Indian IT services company in a sovereign AI company.
HCLTech FY27 guidance
HCLTech has guided for its revenue growth in financial year 2027 to be between 1% to 4% compared to financial year 2026.
The guidance assumes a 50 basis points impact due to client specific issues, and 2% – 3% impact due to AI deflation.
IT services: Street worries
The Street worries on the IT services industry include:
- Industry growth: AI and client weakness intensifying, which is driving structural growth compression.
- Are margins capped for now?
- Regulatory hurdles to access latest AI models.
HCLTech shares up 2.4% at ₹1,146.2 apiece at 9.25 am on Tuesday. The stock has declined 29.9% this year, so far. The stock is down 37% from its 52-week high of ₹1,780.
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