HCL Technologies shares jumped as the company announced an investment in India's top sovereign AI startup, Sarvam AI. The share price rose as much as 3.42% on the BSE to reach Rs. 1,157.50.
At press time, HCL Tech shares are trading at Rs. 1,138 with an increase of 1.68%. Despite the rally, the stock is still 13% down year-to-date (YTD), and it has fallen 8% in one year. HCL Tech has given returns of 51% in three years and 107% in the past five years.
HCL Tech announced that it will acquire a 10.46% stake in Axonwise Private Limited (Sarvam AI) for Rs. 1,427.25 crore in cash and will lead the company’s Series B funding round as strategic investor.
The Bengaluru-based startup's valuation reached $1.5 billion following a $234 million raise, of its targeted $300 million. Additionally, existing investors like Bessemer Venture Partners, Khosla Ventures and Peak XV Partners joined in the fundraise.
The investment will enable the company to advance Sarvam's research and development initiatives in the areas of next-generation AI models for agentic AI, coding, and cybersecurity applications, HCL Tech said.
Sarvam is one of the few companies in India focused on developing a comprehensive AI stack from frontier models, inference infrastructure, and enterprise applications across industries like banking, insurance, government tech, and defence.
"Our investment in Sarvam marks a significant step toward building India's trusted and globally competitive AI ecosystem," said C Vijayakumar, Chief Executive Officer and Managing Director of HCLTech.
"By bringing together Sarvam's research in AI models with HCL Tech's global presence, we are creating a differentiated full-stack AI platform for enterprises and governments, strengthening our ability to deliver secure, scalable, and responsible AI solutions," he added.
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Nomura said the investment will enable HCL Tech to develop industry and client-specific language models and AI solutions for its global client base.
The brokerage has maintained its 'Buy' rating on the stock with a target price of Rs. 1,600, assuming that earnings per share of the stock can be estimated at Rs. 92 per share for FY28. The stock is currently trading at a premium of around 39% to its FY28 estimated earnings of Rs. 79.6 per share, as per Nomura.