Gaja Capital’s next bet is India’s AI stack, from Fractal to Sarvam AI | Company News

Gaja has placed bets at opposite ends of India’s AI stack. One is Fractal Analytics, an enterprise AI company that has since gone public itself. The other is Sarvam AI, the Bengaluru language-model startup that recently persuaded Nvidia to invest alongside it.

 “AI is a five layer cake,” Jain told Business Standard. “We have invested in two layers of that cake.”

Jain has more than 30 years of experience in Indian capital markets and has led or co-led more than 25 private equity investments. He has been investing in Indian equities since the age of 13, starting with Gujarat Ambuja Cement.

Gaja is now pivoting deliberately toward AI and deeptech and evaluating intelligent manufacturing, defence tech, and quantum computing. “AI and deep tech has slowly but surely emerged as a focus. It’s been many years in the making. If you see our work over the last 20 years, it doesn’t come as a surprise,” said Jain. 

Mumbai-based Gaja Capital has made two notable bets in AI. It participated, alongside a consortium of about 22 investors, in a $170 million secondary share sale in Fractal Analytics at a $2.44 billion valuation in July 2025. The transaction was a pre-initial public offering (IPO) secondary sale in which Apax Partners partially exited.

Gaja also invested approximately ₹95 crore in Sarvam AI on August 4, 2026. The investment was part of a $74 million (approximately ₹700 crore) Series B extension led by Nvidia, which invested about $25 million, with Glade Brook Capital investing about $20 million. 

Jain said Gaja Capital sees opportunities across different layers of the AI stack. Fractal represents the application layer. Sarvam AI represents the foundational layer. He said Indian companies can compete globally in AI applications by leveraging the country’s talent and domain expertise. Separately, he said Sarvam’s India-trained models matter for strategic autonomy and Indian-language use cases.

AI and deep tech will remain a focus within Gaja’s flagship Fund V, alongside national services, consumer and education.

“We need to have our own models,” said Jain. “We are a $4 trillion economy. We aspire to become an $8-10 trillion economy. Strategic autonomy is important.”

On next bets related to AI, Jain said the firm is most excited by areas where India’s advantages are already proven, particularly intelligent software, applied AI and AI-first services. He pointed to India’s deep pool of globally deployable software talent, decades of domain expertise and high quality digital public infrastructure. These advantages, he said, are compounding rapidly in software and AI services.

Jain noted that India is increasingly entering areas once considered beyond its reach, with Sarvam AI serving as an example of emerging foundational AI capability. He said building such technology requires significant effort, but reflects a broader expansion of India’s AI ambitions.

Regarding elevated AI valuations, Jain said experienced investors should respond with pricing discipline rather than avoid the sector. He said Indian growth-stage valuations have largely normalised from 2021-22 levels, with investors increasingly rewarding profitable growth and strong governance.

“The response is discipline, not abstinence,” said Jain.

Gaja Capital’s earlier portfolio spans financial services, education, consumer and lifestyle, logistics and SaaS, and industrials.

Gaja’s own recent history offers a parallel story.

Gaja Capital recently took a significant step in the evolution of India’s private markets industry with the public listing of its fund management business. The ₹550 crore IPO was subscribed 31.33 times, reflecting strong investor interest, and the shares listed at a 15.6 per cent premium to the issue price.

The listing was of Gaja Alternative Asset Management Ltd., the fund management company, and not the private equity funds managed by Gaja. The underlying funds continue to operate as private investment vehicles and hold their respective portfolio companies.

Gaja Alternative Asset Management Ltd listed on the National Stock Exchange (NSE) and BSE on August 26, 2026, becoming the first listed AIF or alternative-asset manager on Indian exchanges, with a market capitalisation of about $260 million.

It recently got approval from the Securities and Exchange Board of India (Sebi) for a new fund, Fund V, days after the listing, with a proposed target corpus of ₹2,500 crore.

“For Fund V, there’s a real opportunity as a growth stage investor to participate in India’s growing innovation economy,” said Jain.

Even as Gaja doubles down at home, the broader climate for dealmaking has turned rockier, with the West Asia conflict squeezing startup funding and rattling global capital flows.

Jain said the resilience of the Indian economy has helped sustain investor confidence despite the West Asia conflict. He said the growing pool of domestic institutional capital is reducing the private equity industry’s dependence on global flows. He also noted that foreign private equity investment in India has continued despite volatility in public markets, indicating sustained appetite for Indian private markets.

“I think the independent self-sufficiency of Indian private equity will be further strengthened during this phase,”  said Jain.