⚡️Transformer by Mint: AI’s impacts on Sensex to Saregama
This week, we explored how AI is putting pressure on India’s IT giants, why IIT graduates are chasing equity-heavy paycheques, and where global tech firms are betting billions on India’s data centres.
Dear reader,
BENGALURU: As automation seeps further into workflows across industries, India’s largest IT services companies are feeling the pressure, not just on revenue, but also in their standing among the country’s corporate elite.
Simply put, four of India’s largest IT services firms—Tata Consultancy Services Ltd, Infosys Ltd, HCL Technologies Ltd, and Tech Mahindra Ltd—once held a “villa” in the BSE Sensex. But as automation tools ate into their domain, they have been forced into smaller accommodations.
A Mint analysis shows that four of the country’s five largest IT services companies, which once made up 19% of the benchmark index, now account for just over 11%, the lowest in 18 years. My colleague Dipali Banka and I bring you the details here.
Incidentally, IT stocks’ share in the BSE Sensex has been declining since the launch of ChatGPT in November 2022.
World’s largest phone makers push back against alleged government snooping
Less than a week after the Ministry of Communications mandated that companies pre-install the Sanchar Saathi app, global phone giants Apple, Samsung, and Google pushed back.
While fierce competitors in India’s $50 billion smartphone market, the three stood united. Shouvik Das reported that all three were considering filing representations to the government, calling the directive to pre-install a government app a first—and “odd”—incident.
The issue arose after experts raised concerns about surveillance and privacy, as the app includes cybersecurity and privacy features. The government, however, said the app’s aim was to blacklist smartphones involved in mobile-related frauds. Following the pushback, the ministry rolled back the pre-installation mandate.
Behind the juicy IIT job offers
The high placement packages at India’s premier tech institutes, the Indian Institutes of Technology (IITs), often raise eyebrows. But these lucrative paycheques come with plenty of packaging, report Pratishtha Bagai and Devina Sengupta.
Salary packages worth crores of rupees come with lakhs of rupees worth of equity, bonuses, and clawback provisions to prevent the IIT students from jumping ship. While joining bonuses are nothing new, startups and AI firms have started wooing IIT graduates with stock options to compete with established companies.
Though base salaries start at Rs 23 lakh, unchanged from previous years, many companies now lure students with promises of company shares if they serve a fixed tenure.
Microsoft plans more India data centres
Microsoft’s $3 billion data centre investment in Hyderabad is not the only investment the company is looking at. Puneet Chandok, president of Microsoft India and South-Asia, in a conversation with Shouvik Das, said the company’s investments were “not episodic—they are structural.”
Coming days ahead of CEO Satya Nadella’s visit to the country during 10-12 December, Chandok added that Microsoft, which has data centres in Mumbai, Pune, and Chennai, would continue to “invest more, and we’ll dive deeper into these investments next week.”
Microsoft is among the many global giants pouring money into data centres. On 14 October, Google, in partnership with conglomerate Adani Group and telecom major Airtel, announced a $15 billion investment to build a 1 gigawatt (GW) AI data centre in Visakhapatnam.
On the other hand, the country’s largest IT services firm, TCS, has partnered with TPG to set-up a $1 billion data centre, which Mint has learnt will come up in Navi Mumbai.
VCs tap PhD scholars, founders with deep domain expertise
India’s startup ecosystem is witnessing venture capitalists increasingly backing founders with PhDs and deep domain knowledge, reported Mansi Verma.
If you are a professor who wants to turn a lab project into a profitable venture, this might keep you hooked, because certain VC firms like Artha and Fundamentum increasingly are. Space tech startup Agnikul is a prime example where the founder’s expertise in propulsion technology resulted in a fund raise that now values the company at about $500 million.
The article not just highlighted a new trend, but also a shift where VC firms were shifting their focus on startups where founders mainly focussed on distributions and business execution. Prime examples include Zomato, Ola, Flipkart, and Swiggy.
In other news, Lata Jha reported that music labels such as Saregama and Times Music are turning to automation tools to embellish old songs. Don’t be surprised if you see new age video clips accompanying old classics on YouTube.
Meanwhile, if you were among the first users of Meesho and faced late deliveries, things might have changed. Sowmya Ramasubramanian reported that the entry of Valmo, Meesho’s in-house logistics layer, cut costs and made deliveries more trackable, and helped in expanding the company’s presence in rural areas.
