HCL Technologies has invested $150 million in Indian artificial intelligence startup Sarvam AI, acquiring a 10.46% stake in the company. The deal values Sarvam AI at about $1.5 billion and is expected to be completed in the coming weeks.
The announcement lifted HCLTech shares by nearly 3%. Following the move, Nomura maintained its Buy rating on the stock and retained a target price of Rs 1,600 per share, implying an upside of around 38% from current levels.
First major investment by an Indian IT firm in sovereign AI
According to Nomura, the transaction marks the first time an Indian IT services company has made such a sizeable investment in a domestic sovereign AI company.
Sarvam AI develops foundational AI models within India. Its products cover:
- Language models
- Speech technologies
- Vision models
- Document-processing applications
The startup’s technologies are already being used in sectors such as:
- Banking
- Insurance
- Government technology
- Defence
Sarvam AI already has commercial scale
Sarvam AI’s conversational AI platform handles more than 2 million interactions a day.
Its Sarvam Vision platform is being used to digitise millions of pages of records.
The company’s speech models are also processing large volumes of audio data every month, indicating that the business has moved beyond the early-stage phase.
Nomura sees long-term opportunity
Nomura said the investment could help HCLTech strengthen its position in emerging AI opportunities.
The brokerage expects the funding to support Sarvam AI’s work in:
- Agentic AI
- Coding applications
- Cybersecurity solutions
For HCLTech, the commercial opportunity lies in using Sarvam’s technology to develop:
- Industry-specific AI models
- Client-specific language models
- AI solutions for global enterprise customers
Nomura also highlighted the startup’s multilingual capabilities, saying they could find applications outside India in markets where demand for localised AI solutions is increasing.
Focus on sovereign AI
The brokerage pointed to growing interest in sovereign AI, where governments and regulated industries seek greater control over data, compliance and infrastructure.
As countries and enterprises look to reduce reliance on foreign AI models, domestic alternatives are becoming more important, Nomura said.
It added that HCLTech’s partnership with Sarvam AI could accelerate the adoption of sovereign AI solutions among governments and large enterprises.
The investment comes at a time when India is increasing spending on domestic AI infrastructure.
AI remains a key priority for HCLTech
HCLTech reported annualised Advanced AI revenues of more than $620 million in FY26.
The company has identified AI as a top priority heading into FY27, and the Sarvam AI investment aligns with that strategy.
Headquartered in Noida, HCL Technologies operates across 60 countries and employs more than 2.27 lakh people.
The company reported consolidated revenue of Rs 1,30,144 crore in FY26. Its businesses span AI, digital services, engineering, cloud and enterprise software.
Brokerage view
| Brokerage | Rating | Target Price | Implied Upside |
|---|---|---|---|
| Nomura | Buy | Rs 1,600 | 38% |
TL;DR:
Nomura has maintained a Buy rating on HCLTech after the company invested $150 million in Sarvam AI. The brokerage sees around 38% upside and believes the deal strengthens HCLTech’s position in sovereign AI and specialised AI solutions.
AI summary
- HCLTech will invest $150 million in Sarvam AI for a 10.46% stake.
- The transaction values Sarvam AI at about $1.5 billion.
- Nomura retained a Buy rating and a target price of Rs 1,600.
- The brokerage sees about 38% upside from current levels.
- Sarvam AI’s products are used in banking, insurance, government technology and defence.
