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Happy Tuesday! Sarvam is in talks for a big round that could double its valuation. This and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ Zetwerk IPO eyes big returns
■ Govt clamps down on social media in Delhi
■ Reshuffle at Nazara Tech

AI startup Sarvam in talks for $300 million top-up; valuation may double to $3 billion

Vivek Raghavan and Pratyush Kumar, founders, Sarvam AI

Homegrown artificial intelligence (AI) startup Sarvam

at a $3 billion valuation, potentially doubling its valuation within four months and making it India’s most valuable AI startup, sources told us.

Deal details: Discussions with large domestic enterprises and institutions are early, to keep significant shareholding with Indian entities. Amount and valuation could change.

Quick recap: Sarvam secured more than $300 million

. HCLTech led the round; Nvidia and IndiGo Ventures participated in a $75 million extension.

Why now: It is building larger models and computing infrastructure for enterprise deployments. It plans a trillion-parameter model and a San Francisco office to recruit researchers. It hired Google Cloud India’s former head,

.

Business focus: Sarvam builds Indian-language AI models for government agencies, banks and insurers. Customers include Life Insurance Corp. of India, SBI Life and Cred.

Mesa School of Business raises Rs 110 crore at Rs 385 crore valuation

Varun Limaye (left) and Ankit Agarwal, cofounders, Mesa School of Business

The Mesa School of Business

at a post-money valuation of around Rs 385 crore, as it looks to expand its programmes and incorporate AI into its curriculum.

The details:

• The round comprises Rs 85 crore in equity funding co-led by Dharana Capital and existing investor Elevation Capital, and Rs 25 crore in venture debt from InnoVen Capital and Alteria Capital.
• The round also saw a secondary transaction of around Rs 3 crore by cofounder Varun Limaye, cofounder Ankit Agarwal told ET.

About the company: Bengaluru-based MesaSchool offers undergraduate and postgraduate programmes for startup leadership and entrepreneurship. It has expanded from 60 students in its first cohort to over 550 across three programmes as of August.

HCLTech's Q2 net profit up 21% to Rs 5,132 crore; revenue climbs 11%

C Vijayakumar, MD & CEO, HCL Tech

HCLTech on Monday

in profit and revenue in the second quarter of FY27.

Financials:

• Net profit: Rose 21% on-year to Rs 5,132 crore from Rs 4,235 crore.
• Revenue: Increased 11% on-year to Rs 35,620 crore.
• Interim dividend: Declared Rs 12 per share. October 16 is the record date, while payment is scheduled for October 26, 2026.

CEO’s take: "Even though we saw good demand building up towards the end of the past quarter, we have been a little cautious because in the last two years, the environment has been very volatile," chief executive officer C Vijayakumar said at a press conference. "We just want to be cautious, and we will update you at the end of the third quarter."

Tell me more: The strong numbers guided India's third largest software services company to raise the lower end of the revenue forecast for the full year ending March 2027. It narrowed the FY27 revenue outlook to 2.5-4% from 1-4%, maintaining caution on business demand despite robust growth.

Also Read:

Zetwerk’s early backers stand to make up to 38x returns from IPO

(L-R) Srinath Ramakkrushnan and Amrit Acharya, cofounders, Zetwerk

Early investors in business-to-business (B2B) manufacturing platform Zetwerk are sitting on as much as 38x gross returns at the upper end of its IPO (initial public offering) price band, while collectively realising about Rs 1,152 crore through the offer for sale (OFS).

IPO details: Zetwerk has set a price band of Rs 143-151 per share, valuing it at Rs 25,583 crore ($2.7 billion) at the upper end. The IPO will be worth Rs 5,012 crore at that price, comprising a Rs 2,830-crore fresh issue and a Rs 2,182-crore OFS.

Investor returns:

• Kae Capital: Set to see 38.3-fold gross returns. It will sell 12.6 million shares for about Rs 190 crore and retain stock worth Rs 651 crore.
• Accel: Sitting on 19.3-fold returns, it will realise Rs 181 crore and retain shares valued at Rs 1,611 crore.
• Peak XV Partners: Its two funds are set to clock 3.3x-23.9x returns, depending on acquisition costs. Together, they will realise Rs 353 crore and retain shares worth Rs 2,457 crore.
• Lightspeed Venture Partners: Its three funds are sitting on returns of 2.8x-10.8x. They will earn Rs 427 crore through the OFS and retain shares valued at Rs 1,861 crore.

Manufacturing and supply chains:

that Zetwerk had won about Rs 2,000 crore of AI infrastructure orders. Its manufacturing order book reached Rs 13,062 crore by the end of June, up 53% year-on-year.

Growth strategy: "Global companies invest way more in engineering than Indian companies. We are replicating that framework. It's no surprise in that sense that the largest market in the world today is the AI market," CEO Amrit Acharya told us.

Other Top Stories By Our Reporters

Govt issues 200 takedown orders ahead of Delhi protest: More than 200 takedown orders

through the government’s Sahyog portal ahead of the October 10 protest in New Delhi demanding Chief Election Commissioner Gyanesh Kumar’s resignation, people familiar with the matter told ET.

Nazara founder Nitish Mittersain steps down as MD: In a broad management reshuffle, Nazara Technologies founder Nitish Mittersain

as managing director and transition to the role of founder and non-executive director, effective Monday, the gaming company said in a regulatory filing.

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