Want to tap growing ChatGPT, grok popularity on Dalal Street? Key themes to watch out for

In an interview with Zee Business Managing Editor Anil Singhvi, Gautam Trivedi, Co-founder and Managing Partner at Nepean Capital, shared his insights on a range of topics, including Dalal Street valuations, foreign investor sentiment, IPO trends, and artificial intelligence (AI).

Power Picks, Key Segments | Expert says AI to drive institutional demand

Trivedi views power as a key area of growth. “In the last six months, power has emerged as one of the strongest sectors. Demand will surge across NTPC, private players, and renewables — especially with the (Narendra) Modi government’s push for green energy,” he said.

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Trivedi linked the expected rise in power demand to the growth of AI usage. “A single AI search query consumes about 10 times more power than a Google search. India has around 750-800 million devices running on 4G and 5G... As more people and students use AI tools like ChatGPT and grok, power consumption will continue to rise,” he noted.

“As AI becomes accessible everywhere, even on the move, power demand will keep growing in the coming years,” Trivedi added.

Does AI integration impact the Indian IT space?

Trivedi explained how AI is playing a crucial role in everyone's life. People are using AI applications like Chatgpt, grok and Chatbot, instead of using Google for browsing, he said. Trivedi also mentioned that AI stocks are booming on Wall Street.

Indian IT firms must accelerate their transition toward AI to remain competitive with the world, he noted. “The future of Indian IT depends on how quickly they integrate AI into their operations and revenue models,” he said, adding that AI currently contributes only a small share to their revenue.

Citing TCS’s $7 billion investment in new data centers as a step in the right direction, he observed that Indian IT companies still lack large-scale data, cash reserves, and borrowings. “Institutional authorities must push Indian IT firms toward AI adoption, or they risk falling behind — because the future belongs to AI,” Trivedi cautioned.

Indian valuations among the most expensive globally: Nepean Capital's Gautam Trivedi

Asked whether FIIs find Indian equities expensive, Trivedi explained that valuations have remained high for the past 10-15 years. “Whether you look at Asia, emerging markets, or globally, India has always traded at a premium. Today, our valuations are nearly twice those of China,” he said.

He added that when high valuations combine with an earnings slowdown, FIIs tend to turn cautious. However, strong domestic inflows have helped sustain the market.

“From January till date, institutional investments stand at around $72 billion, while FIIs have sold about $16.5 billion. In term of dollars, the Nifty50 is 4 per cent up this year,” Trivedi noted. “The day this selling trend reverses, it will be positive for the entire market."

FIIs prefer IPOs over secondary market

Highlighting the shift in investor behaviour, Singhvi asked why FIIs are showing greater interest in IPOs despite selling in the secondary market.

Trivedi explained, “FIIs have sold $16.5 billion in the secondary market but invested around $5.5-6 billion in the primary market through IPOs and QIBs.”

He attributed this to better valuations in the primary market. “Many new companies have gone public in the past year, and IPOs are not as expensive as secondary market stocks,” he added.

Global market comparison and outlook

Trivedi pointed out that while India’s markets are up about 4 per cent in dollar terms, Korea has gained around 93 per cent, and China, Taiwan, and Hong Kong have delivered 30-35 per cent returns this year.

Ignoring AI could severely impact IT companies’ future income growth, urging both investors and corporates to adapt quickly, he concluded.