India’s AI strategy: A look at key govt announcements following DeepSeek disruption

Amid questions over India’s place in the global AI race, Union Minister of Electronics and Information Technology Ashwini Vaishnaw, on Tuesday, February 4, said that the country will develop its own Graphics Processing Unit (GPU) in the next three to five years, and a domestic foundational AI platform can be expected in the next 10 months.

“We are working on multiple, actually three options, where we take a chipset which is at some reasonable level available in open source or available as a licensed thing, and then build upon that to build our own GPU. That’s the approach the entire world has followed and that approach will be able to give us India’s own GPU in the time frame of three to five years,” Vaishnaw was quoted as saying in a report by PTI.

Once used to process multimedia content in video games, GPUs are in massive demand across the world as they are now used to power foundational AI models. US chip company Nvidia currently dominates the GPU market with over 80 per cent market share.

The IT minister’s remarks come after Chinese AI startup DeepSeek’s upheaval of the tech industry, sparked by the release of its reasoning model that is said to rival other cutting edge foundational AI models on many fronts despite being built at a fraction of the cost.

DeepSeek’s surge in popularity has prompted a discussion about whether India is lagging behind in the AI race that is increasingly perceived to be dominated by the United States of America and China.

Here is a look at the central government’s announcements in the wake of DeepSeek’s rise.

Local foundational AI model

A few days after DeepSeek’s low-cost foundational model rattled tech stocks across markets, Vaishnaw announced that the government is building a domestic large language model (LLM) of its own as part of the Rs 10,370 crore IndiaAI Mission.

He said that the government is in touch with at least six developers, but did not specify how much it would cost to build the model and the companies the government is currently in touch with.

Vaishnaw also said that the government has selected 18 AI-based apps focused on areas such as agriculture, learning disabilities, and climate change to provide the first round of funding under the IndiaAI Mission.

“Over the last 1.5 years, our teams have been working closely with startups, researchers, professors etc. Today, we are calling for proposals to develop our own foundational model. The model will take care of the Indian context, languages, culture, are devoid of biases,” Vaishnaw told reporters.

Referring to research cited by DeepSeek in making its AI models more efficient, Vaishnaw said, “Many of our researchers and startups are also studying some of those papers. There are some papers of 2003 and 2005 which basically tell you how to do a lot of good engineering on the process.”

GPU procurement

Vaishnaw said that the government will make available 18,000 high-end GPU-based compute facilities for AI development to entities in the country in the next couple of days.

“We already embarked 18,000 GPUs, very high-end GPUs, and out of that, 10,000 are already available. So this 18,000 compute power will be rolled out in a couple of days. The tender process got completed last week, and in another couple of days, 3-4 days, this will be rolled out,” Vaishnaw said.

The government has also selected 10 companies that will supply 18,693 GPUs, including the Hiranandani Group-backed Yotta, Jio Platforms, Tata Communications, E2E Networks, CMS Computers, Ctrls Datacenters, Locuz Enterprise Solutions, NxtGen Datacenter, Orient Technologies, and Vensysco Technologies.

Nearly half of the total GPUs will come from Yotta alone, who has committed to offer 9,216 units.

These GPUs are being procured by the central government under the IndiaAI Mission, which was sanctioned Rs 2,000 crore for 2025-26 (a fifth of the scheme’s total outlay of Rs 10,370 crore), as per the Union Budget 2025 proposed by Finance Minister Nirmala Sitharaman on February 1.

Sitharaman also announced a new presumptive taxation regime for non-residents providing services in India’s electronics manufacturing sector, a move that could give a fillip to foreign technicians and entities working in the electronics sector in India, and help the country’s aspirations of becoming a semiconductor manufacturing base.

Common GPU compute facility

The government will launch a common compute facility, from where startups and researchers can access the computing power, in the next few days. The cost of accessing higher end GPUs would be Rs 150 per hour, and using lower end GPUs would cost Rs 115.85 per hour.

To further ease access to these services, the government will give a 40 per cent subsidy to end users on the total price.

“Globally, GPU access costs $2.5-$3 per hour. We are making it available, after the subsidy for around $1 per hour,” Vaishnaw said.

“The researchers, startups, academicians, colleges, IITs, all of them can have access to this compute power, and they can start foundational models,” the IT minister was quoted as saying.

Centre of Excellence for AI for education

The government will set up a new centre of excellence for AI for education with an outlay of Rs 500 crore, Sitharaman said during her budget speech.

“I had announced three centres of excellence in artificial intelligence for agriculture, health and sustainable cities in 2023. Now, a centre of excellence in artificial intelligence for education will be set up with a total outlay of Rs 500 crore,” she said.

Sitharaman also revealed plans for five National Centres of Excellence for Skilling, designed to equip youth with industry-relevant expertise.

“These centres will be set up with global partnerships to support Make for India, Make for the World manufacturing,” Sitharaman stated. The initiative will cover curriculum design, training of trainers, a skill certification framework, and regular assessments.

These moves come amid concerns that AI could displace a number of jobs in India. “Although the impact of AI on labour will be felt across the world, the problem is magnified for India, given its size and its relatively low per capita income,” read the Economic Survey 2024-25 released on January 31.

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Religare AGM: Rashmi Saluja blocks vote on her removal; SC gives a chance to Gaekwad

Religare Enterprises Ltd chairperson Rashmi Saluja informed shareholders at the company’s annual general meeting (AGM) on Friday that investors could not vote on her continuation for now as she was not retiring as a director, a move that stumped shareholders and proxy advisory firms.

After opening remarks by the management, shareholders convened to vote on three resolutions, including Resolution No. 2 on Saluja’s reappointment as a director.

According to a draft copy of the AGM proceedings that Religare shared with the stock exchanges, Saluja said, “[A]s per the 2nd resolution I don’t offer myself for re-appointment as I am not liable to retire by rotation.”

At this point, P.K. Tripathi, one of the four independent directors, intervened to request that the shareholders be allowed to vote.

“I would also like to state that the Board is committed not only to support the Management but also to support the stakeholders. Therefore it is the duty of the Board to ensure the AGM is held and the Agenda for the AGM is discussed,” Tripathi said, according to the draft of the minutes. “The nutshell is the right of the stakeholders to exercise their vote on the agenda cannot be taken away.”

Saluja’s move was unpexpected, as multiple court appeals had been filed since December seeking a stay on the shareholder meeting. The first was by an investor before the Jabalpur bench of Madhya Pradesh High Court and the second by another minority investor in the Delhi High Court. Finally, Saluja also sued the company she heads, asking the Delhi High Court to stay the AGM proceedings. All of these interventions were made because Saluja ran the risk of being ousted as a director of the company.

In the high court, Saluja’s lawyer had argued that the AGM agenda violated her contractual tenure, which is secured until 2028, and the conditional Reserve Bank of India (RBI) approval given on 9 December 2024.

The courts, however, declined to offer any relief.

Religare’s five-member board includes Saluja, Tripathi, Malay Sinha, Ranjan Dwivedi and Preeti Madan. Other than Saluja, all others are independent directors.

“[I]t is a very, very important AGM for multiple reasons,” Saluja said, as she, along with the independent directors presided over the shareholder meeting from Religare’s office in Delhi.

At the same time, investors had logged into the proceedings virtually. This decision by Saluja implied that Religare’s shareholders could not vote on her reappointment on Friday. However, most investors had cast their vote on the three resolutions using the electronic voting facility between Tuesday and Thursday.

Religare said the voting outcome would be announced before Sunday evening. On Tuesday, around a third of Religare’s investors told Mint that they had voted against Saluja’s reappointment as director.

Emails sent to Saluja and Religare remained unanswered.

“In 2022 and 2023, her (Saluja) appointment as a director who retires by rotation was tabled before shareholders. Shareholders approved it. So, my question is why she is objecting to her reappointment this year,” wondered Amit Tandon, founder and managing director of Institutional Investor Advisory Services (IiAS), a proxy advisory firm.

Manendra Singh, partner at law firm Economic Laws Practice outlined the chairman’s role at shareholder meetings.

“Under the Companies Act, 2013, the chairman is mandated to ensure that the meeting is duly constituted in accordance with the Act and the Articles or any other applicable laws, before it proceeds to transact business. The chairman shall then conduct the meeting in a fair and impartial manner, and ensure that only such business as has been set out in the notice is transacted. The chairman shall regulate the manner in which voting is conducted at the meeting, keeping in view the provisions of the Act,” Singh said.

Singh, however, noted that in an event where chairman is the interested party in any item of business, “without prejudice to his voting rights on resolutions, he shall entrust the conduct of the proceedings in respect of such item to any non-interested director or to a member, with the consent of the members present, and resume the chair after that item of business has been transacted. 

However, the power to regulate meeting does not explicitly provide that voting rights of members can be taken away from an agenda item. In fact, any resolution proposed for consideration through e-voting shall not be withdrawn,” Singh added.

Competing takeover

Earlier on Friday, the Supreme Court directed Digvijay “Danny” Gaekwad to deposit ₹600 crore in an escrow account by 12 February to prove the credibility of his counter-offer. Gaekwad first proposed a counter-bid to the billionaire Burmans’ ongoing open offer on 24 January.

Two days later, he raised the offer of ₹5,000 crore to buy up to 55% of shares. However, the Securities and Exchange Board of India (Sebi) returned his letter, as it did not conform to the regulator’s exemption application rules under the takeover code. This prompted Gaekwad to file a petition before the Supreme Court on Thursday.

A Bangkok-based investor, Sapna Govind Rao, also sought the Delhi High Court’s intervention, requesting that minority shareholders be allowed to evaluate Gaekwad’s higher open offer. The court declined to offer any relief to Rao. 

Gaekwad claims his offer of ₹275 a share to buy up to 55% of Religare is better than the Burman family’s offer of ₹235 a share. In the letter to Sebi, he said his financial resources are readily available. He added that unlike the Burmans, his group has no other non-banking financial company, so it can give Religare its undivided attention and infuse capital.

Meanwhile, the Supreme Court directed Sebi to rule swiftly on the legality of the Burmans’ takeover timeline. 

On 4 October 2023, the Burmans made the first public statement on their open offer. After much delay, the Burman family, which owns a little over 25% of Religare, got approvals from all regulatory agencies and made another announcement on 18 January to buy up to 26% shares from minority investors via an open offer that opened on 27 January. 

It was to end on Friday, but following the hearing on Gaekwad’s appeal, the Supreme Court said the Burmans’ open offer cannot be closed until the Sebi decides on the legality of Gaekwad’s competing offer.

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Ajax Engineering IPO: Kedaara Capital-backed firm secures ₹379 crore from anchor investors

Bengaluru-headquartered Ajax Engineering’s ₹1,269-crore initial public offering (IPO) will hit Dalal Street on Monday, February 10. Ahead of the issue launch, the concrete equipment manufacturer has garnered over ₹379 crore from anchor investors on February 7, 2025. The issue will close for subscription on February 12.

The Kedaara Capital-backed company has allocated shares to SBI Mutual Fund (MF), Axis MF, HSBC MF, Edelweiss MF, ITI MF, Amundi Funds New Silk Road and Franklin Templeton Investment Funds, among others

The company has allotted 60.3 lakh shares to 23 funds at ₹629 apiece, which is also the upper end of the IPO price band. This aggregates the transaction size to ₹379.3 crore.

The company has set a price band of Rs 599 to Rs 629 per share. Investors can bid for a minimum of 23 equity shares in one lot and in multiples thereof.

The company’s IPO is a complete offer-for-sale (OFS) of 2.01 crore shares, valued at Rs 1,269 crore at the top of the price range, by its promoters and an investor shareholder.

As part of the OFS, Kedaara Capital will offload 74.37 lakh shares.

Since the public issue is completely an OFS, Ajax Engineering will not receive any proceeds from the IPO.

Considering the upper end of the price band, the company’s market capitalisation has been pegged at Rs 7,200 crore.

Ajax Engineering is a leading concrete equipment manufacturer with a comprehensive range of related equipment, services and solutions across the concrete application value chain. The company operates four assembling and manufacturing facilities in Karnataka, each specializing in distinct product lines. Besides, an assembling and manufacturing facility at Adinarayanahosahalli, Karnataka is under construction and expected to become operational in August 2025.

Ajax Engineering has seen healthy financial performance in the past years, with the profit in fiscal 2024 growing sharply by 65.7% to Rs 225.1 crore and revenue increasing by 51.3% to Rs 1,741.4 crore, compared to previous financial year.

Profit in the six months period ended September 2024 soared to 21.8% to Rs 101 crore and revenue grew by 12.4 percent to Rs 770 crore compared to the corresponding period last fiscal.

ICICI Securities, Citigroup Global Markets India, JM Financial, Nuvama Wealth Management and SBI Capital Markets are the book running lead managers to the issue.

The allotment for the Ajax Engineering IPO is expected to be finalised on February 13, 2025. Ajax Engineering IPO will be list on BSE, NSE with a tentative listing date fixed as February 17.

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Buy State Bank of India; target of Rs 900: Prabhudas Lilladher

SBI reported a soft quarter as core PPoP missed PLe by 8.2% due to miss on NIM/fees/opex although loan growth was superior. Asset quality was better and core PAT beat PLe by 9.2% as provisions were materially lesser since (1) lower net slippages led to controlled credit costs and (2) there was a provision write-back as a corporate account was upgraded from restructured. NIM was lower led by QoQ fall in CASA, rise in borrowings and sharp drop in international yields. As MCLR resets higher on a portion of loans in Q4FY25, domestic loan yields could improve, supporting NIM. Credit growth guidance is maintained at 14% for FY25; deposit growth was guided at 10% due to LDR cushion. We lower NIM for FY25/26/27 which would be offset by slight reduction in provisions.

Outlook

The stock is currently trading at 0.9x on Sep’26 core ABV; we lower multiple to 1.3x from 1.5x and trim SOTP-based TP to Rs900 from Rs1025. Retain ‘BUY’.

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Infosys forcefully terminates around 400 trainees in Mysuru, employees cry foul

Software major Infosys is in the process of laying off 400 trainees at its Mysuru campus after they failed evaluation tests in three consecutive attempts, according to sources familiar with the matter.

This is approximately half of the trainees onboarded in October 2024.

As it happens, the trainees were onboarded after a two-and-a-half-year-long wait, necessitated by a macroeconomic slowdown triggering clients of IT companies to halt spending on projects.

“At Infosys, we have a rigorous hiring process where all freshers, after undergoing extensive foundational training at our Mysuru campus, are expected to clear internal assessments. All freshers get three attempts to clear the assessment, failing which they will not be able to continue with the organisation, as is also mentioned in their contract. This process has been in existence for over two decades and ensures a high quality of talent availability for our clients,” Infosys said in a statement.

Trainees are being called in batches of around 50 and are being made to sign “mutual separation” letters, sources familiar with the matter told Moneycontrol.

“This is unjustified because the tests were very tough and made to fail us, many trainees have fainted as the future looks bleak now,” a trainee told Moneycontrol who was terminated.

Sources say the company has deployed bouncers and security personnel to ensure that the trainees do not carry mobile phones. However, Infosys clarified that bouncers were not deployed.

Trainees have been asked to vacate the premises by 6 PM, the sources said.

Nascent Information Technology Employees Senate (NITES) said it is filing an official complaint with the Ministry of Labour & Employment, demanding immediate intervention and strict action against Infosys.

“This blatant corporate exploitation cannot be allowed to continue, and we urge the government to take swift action to uphold the rights and dignity of Indian IT workers,” Harpreet Singh Saluja of NITES said in a statement.

The said trainees were recruited in the role of System Engineers (SE) and Digital Specialist Engineers (DSE).

India’s second-largest software exporter sent offer letters back in 2022 but did not on-board the candidates after the IT industry faced a slump. This phenomenon, however, is an industry-wide issue. Fears of a looming recession in IT companies’ major markets and the absence of discretionary spending led companies to pause hiring, leading to a multi-decadal decline in headcount.

On September 3, Infosys sent letters with joining dates to approximately 1,000 freshers from 2022 campus hires, just a day after it issued similar number of letters.

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