The lack of an AI play may have contributed to the 8-10% decline in Indian stock markets so far in 2026. But a small segment of domestic businesses has boomed thanks to their links to AI.
A number of companies building AI infrastructure and supplying hardware have delivered robust returns to shareholders, including those supplying components, cables and wiring, grid systems, and transmission lines for chipmakers and data centres. Take, for instance, Acutaas Chemicals and CG Power and Industries Solutions, whose shares have risen 93% and 45%, respectively, so far in 2026.
Surat-based Acutaas makes specialty photoresist chemicals used in semiconductor circuits. In February, the company acquired a 75% stake in South Korea-based Indichem Inc., turning it into a joint venture for expansion into the global semiconductor specialty chemicals market.
Meanwhile, CG Power is expanding its semiconductor presence through its subsidiary CG Semi, which operates a state-of-the-art outsourced semiconductor assembly and testing (OSAT) facility in Sanand, Gujarat. The company has partnered with Thai and Japanese semiconductor companies to strengthen its manufacturing capabilities. Its subsidiary, Axiro Semiconductor, also has a radio frequency chip designing facility in Bengaluru.
Power, distribution, and transmission equipment makers have benefited from the massive energy needs for rapidly expanding data centres. Shares of companies such as GE Vernova India, Hitachi Energy India, and Quality Power have gained 61-86%. “We are looking at a much higher demand for data centres…data centres give you a better realisation of prices for the same products,” GE Vernova’s management said after their Q4 earnings.
Data centres need equipment such as transformers for reliable power supply. As such, electrical infrastructure providers are crucial to ensuring the robustness of these centres.
Complex electrical and power systems also need robust cables and wiring, which benefits companies such as Polycab India and RR Kabel, with their share prices up 25-71% this year. “In power sector alone, if Rs 100 is spent on transmission and distribution, the translation to cable requirement is around 15% to 20%, which basically indicates that any amount invested in the power sector will translate into heavy demand for cable and wire,” Polycab’s management said in the Q4 earnings call.
AI beneficiaries
Similarly, many other companies have ridden this AI boom, manufacturing hardware, providing software services, and playing a role in the AI value chain. Shares of Netweb Technologies, which designs AI servers and deploys them to help train AI models, have risen 59% this year. MTAR Technologies, which manufactures precision components used in semiconductor manufacturing, has more than tripled. E2E Networks, which provides AI-focused GPU cloud services, has more than doubled.
“AI will eventually have an impact on every business,” Persistence Capital said in a report earlier this month. “For now, we think it positively impacts two kinds: those that enable the build-out, and those that can immediately use AI to cut costs or launch new products.”
The problem, however, is that these companies have “immaterial representation in frontline Indian indices”, Persistence Capital said. “In other markets, the AI winners are the biggest names, easy to find. India sits below the top of the index.”
While FIIs have been heavy sellers across most sectors, they have increased their stakes in many of the aforementioned AI-linked companies, reflecting their importance in the AI value chain.
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FIIs have pulled out around $30 billion from Indian equities so far in 2026, with their holdings in NSE-listed companies dropping to a 17-year low of 15.8% as of the end of March.
However, foreign investors have raised their stakes in the likes of MTAR Tech, Polycab, GE Vernova, and Hitachi Energy. MTAR Tech has been among the biggest beneficiaries, with FIIs increasing their stake in the company by over 5 percentage points quarter-on-quarter to 17.31% as of March 31. Polycab saw its FII holding increase by 3.4 percentage points to 18.21%. FIIs also raised their stake in Acutaas by 2.8 percentage points to 19.48%.
FIIs may have heavily sold Indian equities in recent months, but the AI boom has not bypassed domestic companies. They may be out of the limelight, but they are building the physical infrastructure that underpins global AI leaders such as Nvidia and AMD.
The stock market continued its rally on Friday. (Source: Express Archives) 
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