In an exhibition hall at the India AI Impact Summit, held in New Delhi this week, a four-legged figure drew a dense crowd. The robotic dog paced across the hall as visitors gathered, sniffed the floor as if tracking scents, ducked into remote corners, and rose onto its hind legs to offer retriever-like gestures to amused onlookers.
The robodog, named Orion, gave the impression of a new breakthrough. For a while, it appeared to embody what the summit wanted to project: India’s growing artificial intelligence capabilities and technical sophistication within reach. By the following day, the mood around it changed.
After Orion’s handlers—representing Greater Noida’s Galgotias University—described it as a creation of their own, social media users quickly identified it as a robodog developed by a Chinese company that can be bought for about Rs 2-3 lakh. Miffed at the controversy, event organisers asked the university to vacate the hall.
It was a small controversy at a large event. But in some ways, it captured the broader tension facing India’s AI ambitions in terms of highlighting the difference between showcasing capability and demonstrating it.
However, beyond this distraction lies the larger story of where capital and policy attention are being directed.
The event itself was consequential. Attended by delegates from over 100 countries, it was designed to signal that India’s AI ambitions are moving beyond discussion toward application. More than 300 exhibitors participated, and sessions were held on governance, ethics, and cross-border collaboration. The emphasis was practical: healthcare tools, enterprise systems, infrastructure, and so on.
Several announcements reinforced that shift. Tata Consultancy Services said that ChatGPT parent OpenAI would be the first customer for its data centre business as part of a broader initiative to build AI training and computation infrastructure. Yotta Data Services, backed by the Hiranandani Group, outlined plans to invest over $2 billion in Nvidia Blackwell chips to construct an AI hub. Infosys tied up with Anthropic to integrate advanced AI models into enterprise workflows across sectors from telecom to finance.
India’s two largest conglomerates also put serious capital behind that ambition. Reliance Industries pledged $110 billion and the Adani Group $100 billion towards data centres – betting that cheaper computing, integrated energy assets, and tax incentives can turn India into a viable AI infrastructure hub.
Seen together, these commitments suggest a transition from experimentation to foundational build-out – computing power, cooling, and connectivity. AI systems are becoming more resource-intensive and the constraint increasingly lies in access to large-scale, reliable computing capacity. That shift carries both promise and risk. Data centres require land, power and water supply agreements, and long capital cycles. Advanced chips are costly. Returns depend on utilisation, global integration, and sustained enterprise demand.
The summit underscored that the ambition is to move beyond experimentation toward infrastructure ownership and integration into global AI networks. But ambition and resource allocation are two different things. It is one thing to announce a large investment or outline a bold vision, it is another thing to actually deploy the capital efficiently, build the infrastructure on time, attract customers, and generate returns.
For investors, it will be important to watch whether these commitments can potentially translate into operating assets and stable cash flows over time. On one hand, AI enthusiasm can drive valuations quickly. On the other hand, infrastructure building compounds slowly and demands patience.
This week’s summit did not resolve that equation. What it did signal is that India’s AI push is moving into a phase defined less by demonstrations and more by data centres, power agreements, and computing capacity.
Tighter Credit, Wider Consequences
While the AI summit focused on India’s future tech infrastructure, the Reserve Bank of India has tightened rules governing existing financial market infrastructure.
The RBI has revised the framework governing bank lending to capital market intermediaries – brokers, clearing members and market makers. From April 1, all such credit facilities must be fully secured. In effect, a Rs 100 loan must now be backed by equivalent eligible collateral.
The central bank has specified what qualifies as collateral while excluding short-term commercial paper and non-convertible debentures of up to one year. Collateral cover must be maintained on an ongoing basis, with explicit margin-call provisions. Previously, full collateralisation was not mandated across the board.
Banks are also barred from funding brokers’ proprietary trading positions, except in limited cases such as market making and warehousing of debt. Guarantees for proprietary trades must be fully backed, with at least 50% in cash. The direction is clear: leverage within the system must sit on firmer buffers.
The move has triggered strong pushback from brokers. The Association of NSE Members of India has written to the regulator seeking a six-month pause, arguing that the tighter norms will restrict access to bank finance for proprietary desks and market makers, potentially reducing liquidity and raising trading costs. It warned that this could deter foreign portfolio participation. The RBI has not publicly indicated any reconsideration.
Why is this happening now? Over the past few years, leverage in certain pockets of the market – particularly around margin funding and structured exposures – has expanded alongside strong retail participation and buoyant sentiment. The revised norms suggest the central bank is acting preemptively, tightening conditions before stress emerges rather than after it does.
What does it potentially change? Brokers will need to lock up more capital against bank funding, reducing leverage and likely raising the effective cost of certain trading activities. Liquidity at the margin may adjust. But, the broader architecture of market intermediation remains intact. The shift is less about restricting activity and more about clarifying who bears risk – and on what terms – within the banking system.
Narrowing the Gap
If the RBI tightened leverage in the brokerage system, capital markets regulator SEBI this week turned its attention to pricing discipline in another corner of the market: exchange-traded funds.
SEBI wants to change how ETF price bands are calculated and replace the current fixed ±20% band, based on a two-day-old NAV, with a framework anchored to more recent data and, in some cases, dynamic limits.
For gold and silver ETFs, the regulator has proposed an initial ±6% band that can widen in calibrated stages, with cooling-off intervals between expansions. It has also suggested aligning limits more closely with derivative market caps and introducing a pre-open session to improve price discovery.
The immediate trigger behind the proposed change is recent volatility. Because ETFs currently use a T-2 NAV as the reference for price bands, a one-day lag can anchor trading limits to stale values. In periods of sharp moves – particularly in gold and silver, which trade globally beyond Indian market hours – this has led to distortions between ETF prices and the value of the underlying assets. In a few cases last year, daily movements breached 20%.
The broader issue is structural. India’s ETF market, especially in commodities, remains relatively shallow. When supply of units tightens or global prices move overnight, ETFs can trade at noticeable premiums or discounts to NAV. That gap may not matter to long-term holders, but it complicates price discovery and exposes short-term investors to slippage. The regulator appears concerned about ensuring orderly transmission between global prices and domestic trading.
For ETF investors, the practical impact is subtle. The underlying exposure does not change – a gold ETF will still track bullion prices, adjusted for duties and domestic factors. What may change is the path between global price movement and the traded price visible on the exchange. Wider initial caps in volatile conditions, combined with staged expansion, could mean fewer abrupt freezes or dislocations when global prices move sharply outside Indian trading hours.
SEBI’s proposed changes aim to reduce mismatches rather than alter asset-class risk. The objective is not to make gold less volatile, but to make ETF pricing more reflective of underlying value in real time. In that sense, the reform is about smoother transmission, not different outcomes.
Running Out of Charge
Moving on to corporate developments, apart from the AI summit, India Inc had a rather quiet week after a busy earnings season. But one company still managed to catch our eye. That company was Ola Electric.
The electric-two-wheeler maker’s shares fell to a record low of Rs 27.35 apiece after several brokerages downgraded the stock to “Sell” from “Buy” and cut its target price. Citi halved its target price to Rs 27 while Emkay Global and Kotak Securities cut the price to Rs 20. To give you a clearer idea why that’s worrisome, the stock is now down two-thirds from its IPO price of Rs 76 in August 2024 and has slumped 82% from its record high of Rs 157.53 that very month.
Here’s another nugget—individual investors now own a stake of nearly 30% in the company. That’s up from less than 10% in September 2024. Meanwhile, the stake held by Ola Electric’s venture capital backers—including Japan’s SoftBank—has fallen to less than 15%, less than half the September 2024 levels.
What’s going wrong for Ola? Well, the immediate trigger for the stock re-rating was caution around falling sales volumes, market-share loss and continuing cash burn. Ola’s third-quarter revenue fell 55% year-on-year to Rs 470 crore while sales volume slipped 61%.
Net losses narrowed but still came in at Rs 487 crore. Gross margins improved to 34.3%, supported by vertical integration and tighter cost control. The company now says it aims to cut costs even further, by as much as 50%, but it is also expecting lower sales than its peak numbers.
Bhavish Aggarwal-led Ola was the market leader with a share of over 50% not so long so. But it has quickly lost market share as traditional powerhouses—TVS Motor, Bajaj Auto and Hero MotoCorp—expanded their EV lineup and as another startup that went public last year, Ather Energy, strengthened its position.
In fact, Ather now sells more than double the number of e-scooters than Ola. No wonder, then, that its share price has also more than doubled since its IPO in May 2025 and its market valuation has jumped to Rs 28,000 crore versus Ola’s 12,140 crore.
Clearly, making a comeback won’t be easy for Ola. Investors are focused on cash flows and profitability. Their viewpoint is shifting from valuing growth narratives to evaluating unit economics and capital discipline.
But sustained losses and negative free cash flow raise critical questions for Ola, particularly in a segment where pricing power is limited and demand remains sensitive.
Market Wrap
Stock market benchmarks managed to end in the green this week, led by gains in banks and despite worries about US-Iran tensions and AI-led disruption.
The Nifty 50 added 0.4% while the BSE Sensex rose 0.2% for the week. In the broader market, the small-cap index fell 0.2% and the mid-cap index inched 0.1% higher.
As many as 12 of the 16 major sectors clocked weekly gains. The PSU bank index was the top gainer, rising 5.5%.
The IT index fell 2.1%, logging a loss for the fifth week in a row. Among top IT stocks, Tech Mahindra was the biggest loser as it slid 5%. Wipro fell about 2% while Infosys, HCL Tech and TCS also closed in the red.
Overall, Zomato and Blinkit parent Eternal was the biggest Nifty loser as it skid 5.5% for the week. Auto stocks Mahindra & Mahindra, Maruti Suzuki, Eicher Motors and Tata Motors Passenger Vehicles closed the week with losses. Other Nifty laggards included retailer Trent, Jio Financial, Grasim, and UltraTech.
Larsen & Toubro was the top Nifty gainer, rising almost 5% after selling a power plant in Punjab to Torrent Power. PSU stocks ONGC, Power Grid, Coal India and NTPC climbed as much as 4%.
Other gainers included insurers HDFC Life and SBI Life, FMCG companies ITC and Tata Consumer, metal stocks Hindalco and Tata Steel, and lenders Axis Bank and SBI.
Other Headlines
- Torrent Power to buy L&T’s Nabha power plant for enterprise value of Rs 6,889 crore
- Novartis to sell Indian unit to private equity firm ChrysCapital for Rs 1,446 crore
- Hindustan Unilever to invest Rs 2,000 crore over two years to grow premium categories
- French auto parts maker Valeo to invest over 200 million euros to expand India sales
- Danish toymaker Lego plans to open 50 stores in India by 2030
- Dabur promotes Mohit Malhotra to global CEO, names Hershey exec Herjit Bhalla as India CEO
- Maruti Suzuki launches maiden EV, e-Vitara, with battery rental plan to reduce upfront costs
- India’s unemployment rate rises to 5% in January from 4.8% in December
- India’s January trade deficit widens to athree-month high of $34.68 billion in January
That’s all for this week. Until next week, happy investing!
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