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Promoters raise holdings

Promoters raise holdings

Several promoters of Indian companies have strategically increased their stakes in their respective firms recently. This move signifies a growing confidence amongst key stakeholders in the long-term prospects of their businesses. Data reveals a noticeable uptick in promoter shareholding across various sectors, indicating a broader trend rather than isolated incidents.

The increase in holdings has been achieved through various means, including open market acquisitions, preferential allotments, and creeping acquisitions. These investments demonstrate a proactive approach by promoters to capitalise on perceived undervaluation and reinforce their commitment to the company’s future growth. The specific percentages of increase vary, but the overall impact is a strengthening of promoter control and alignment of interests with other shareholders.

Furthermore, this increased activity in the stock market suggests that promoters view the current market conditions as favourable for long-term investment. Some promoters may view the current weakness as an opportunity to increase their ownership at relatively lower prices. This strategic move not only bolsters their position but also sends a positive signal to the market regarding the company’s intrinsic value.
Companies Involved
The companies witnessing increased promoter activity span a diverse range of sectors, including finance, manufacturing, and technology. Notable examples include a prominent non-banking financial company where promoters increased their stakes through open market acquisitions, signaling their belief in the company’s future growth trajectory. Similarly, in the manufacturing sector, the promoter group of a leading engineering firm augmented their shareholding via preferential allotment, reinforcing their commitment to expansion plans. These are just a few instances of a wider trend.

Several mid-sized Indian companies have also experienced significant increases in promoter holdings. In many of these instances, promoters took advantage of a perceived weakness in the stock market to consolidate their positions. This suggests that promoters are not only focused on short-term gains but are also looking to strengthen their long-term control and influence over their companies. This strategic investment demonstrates confidence in the underlying strength and potential of these businesses, even amidst market volatility.

Furthermore, there are examples of smaller, family-owned businesses where promoters have increased their stakes through creeping acquisitions. This gradual increase in shareholding allows promoters to solidify their control without triggering mandatory open offer requirements. Regardless of the specific method employed, the common thread is a renewed commitment by promoters to their respective businesses, underlining a positive outlook for the future. This increase is a demonstration of faith in the companies’ future.
Reasons Behind Increase
Several factors underpin this recent surge in promoter shareholding across Indian companies. One primary driver is the perception of undervaluation. Promoters often believe their company’s stock price does not accurately reflect its intrinsic value, particularly during periods of market volatility or sector-specific challenges. By increasing their stakes, they aim to capitalise on this perceived discrepancy and benefit from future price appreciation.

Another significant reason is the desire to consolidate control and strengthen their influence over strategic decision-making. In an increasingly competitive business environment, promoters seek to ensure their vision for the company’s future is effectively implemented. A higher shareholding provides greater voting power and allows them to navigate challenges more effectively. This proactive approach to governance aims to enhance long-term stability and performance.

Furthermore, regulatory changes and a more stable economic outlook may also contribute to this trend. The Indian government’s efforts to improve the ease of doing business and promote investment have created a more favourable environment for companies. Coupled with expectations of sustained economic growth, promoters are increasingly confident in the long-term prospects of their businesses and are willing to make significant investments to reinforce their positions.
Market Impact
The increased promoter shareholding is likely to have a multifaceted impact on the stock market. Firstly, it can be interpreted as a positive signal, boosting investor confidence and potentially leading to an increase in share prices. When promoters demonstrate their faith in the company by increasing their stakes, it sends a strong message to the market that the company is undervalued and has strong growth prospects. This, in turn, can attract further investment from both retail and institutional investors, driving up demand for the company’s shares.

However, the impact isn’t uniformly positive. In some instances, a significant increase in promoter holdings could reduce the free float of shares available in the market. This reduced liquidity might lead to increased volatility and potentially make it more difficult for smaller investors to trade the stock. The perception of reduced liquidity can also deter some institutional investors who require a certain level of trading volume for their investment strategies. Thus, the net effect on share prices can be complex and depend on a variety of factors, including the overall market sentiment and the specific circumstances of the Indian companies involved.

Furthermore, increased promoter stakes can influence corporate governance dynamics. While a stronger promoter presence can streamline decision-making and ensure alignment with long-term strategic goals, it could also raise concerns about minority shareholder rights. It is crucial that promoters act in the best interests of all shareholders, not just their own, to maintain market confidence and ensure fair value discovery. Increased scrutiny from regulatory bodies and investor activism may arise to ensure that corporate governance standards are upheld and that minority shareholders’ interests are adequately protected. The long-term sustainability of the increase depends on how promoters exercise their strengthened control.

May 12, 2025
India’s fintech surge makes it a global funding giant

India’s fintech surge makes it a global funding giant

India’s fintech sector experienced a phenomenal surge in funding during the first quarter of 2023, solidifying its position as a global leader in attracting investment. The sheer volume of capital pouring into Indian fintech startups is staggering, exceeding many established markets. This influx of funding reflects the immense potential investors see in the rapidly expanding Indian digital economy and the innovative solutions being developed to address its unique challenges.

Several factors contribute to this funding frenzy. Firstly, India boasts a massive and increasingly digitally literate population, creating a huge potential market for fintech products and services. Secondly, the government’s proactive digitalisation initiatives, such as the Unified Payments Interface (UPI), have provided a robust infrastructure for fintech innovation to flourish. This supportive regulatory environment, coupled with a burgeoning entrepreneurial ecosystem, makes India an attractive destination for global investors.

This funding isn’t just concentrated in a few areas; it’s spread across diverse fintech sub-sectors. From digital payments and lending to insurtech and wealth management, Indian startups are attracting significant investment. This diverse funding landscape indicates a robust and resilient fintech ecosystem, capable of withstanding market fluctuations and continuing its growth trajectory. Experts predict that this trend will continue, potentially making India the third-highest recipient of global fintech funding by Q1 2025.

The substantial funding secured by Indian fintech companies isn’t just about raising capital; it’s about building capacity, expanding operations, and accelerating innovation. This investment fuels further growth, creating a positive feedback loop that attracts even more funding. The future looks bright for the Indian fintech sector, promising further disruption and significant global impact.
Regulatory Landscape
Navigating the regulatory landscape is crucial for India’s thriving fintech ecosystem. The Reserve Bank of India (RBI) plays a central role, setting guidelines for digital payments, lending, and other financial services. While the RBI aims to foster innovation, it also prioritises consumer protection and financial stability. This balancing act requires a nuanced approach, ensuring regulations don’t stifle growth while safeguarding the interests of users.

The government’s broader digitalisation agenda significantly impacts the regulatory environment. Initiatives like the UPI have demonstrably boosted fintech adoption, creating a fertile ground for new businesses. However, regulations around data privacy and cybersecurity are also evolving rapidly, reflecting the increasing importance of protecting sensitive financial information in a digital age. These regulations need to adapt quickly to keep pace with the sector’s rapid innovation.

India’s regulatory framework is still developing, and there’s ongoing debate about the optimal balance between promoting innovation and managing risk. Discussions around open banking, the use of AI in financial services, and the regulation of cryptocurrencies are shaping the future of the regulatory landscape. International best practices are often referenced, but the unique characteristics of the Indian market necessitate tailored solutions. The government’s commitment to a collaborative approach, involving stakeholders across the fintech ecosystem, is vital for creating a supportive yet robust regulatory framework.

The interplay between funding and regulation is particularly noteworthy. The massive influx of investment into India’s fintech sector places a premium on clear and consistent regulations. Investors need confidence that the regulatory environment is stable and predictable to ensure long-term growth. This clarity not only attracts further investment but also encourages responsible innovation within the ecosystem. A well-defined regulatory framework is crucial for India to maintain its position as a global fintech leader and potentially become the third-highest recipient of global fintech funding by Q1 2025.
Global Impact
India’s fintech surge is not just a domestic phenomenon; it’s reshaping the global financial landscape. The massive investment flowing into Indian fintech companies is creating a ripple effect, influencing innovation and competition worldwide. Indian fintech startups are increasingly exporting their solutions, particularly their mobile payment technologies, to other emerging markets facing similar challenges in financial inclusion.

The success of India’s UPI, a real-time payment system, serves as a prime example of this global impact. Its efficiency and scalability have attracted international attention, with other countries exploring similar models. This export of successful models and technologies positions India as a significant player in shaping the future of global financial technology.

Furthermore, the sheer volume of funding attracted by Indian fintech companies is impacting the global distribution of investment. As India solidifies its position as a major hub for fintech innovation, global venture capitalists and investors are increasingly directing their attention and capital towards the Indian market. This increased competition for investment opportunities in India is potentially impacting investment decisions in other regions.

Beyond the direct export of products and technologies, the Indian fintech ecosystem is fostering a global talent pool. The rapid growth of the sector has attracted skilled professionals from around the world, contributing to the development of innovative solutions and further strengthening India’s position as a global leader. This talent pool, in turn, is fuelling innovation not only within India but also impacting the global fintech landscape through talent migration and knowledge sharing.

The potential for India to become the third-highest recipient of global fintech funding by Q1 2025 underscores its growing influence. This achievement would not only reflect the country’s domestic success but also its increasing contribution to the global fintech ecosystem, solidifying its role as a major player in shaping the future of finance.

April 8, 2025
L&T Technology Services surges on major European auto deal

L&T Technology Services surges on major European auto deal

L&T Technology Services (LTTS) has secured a significant new contract with a major European auto manufacturer. The deal, valued at €50 million, represents a substantial win for the Indian IT services company and showcases its growing presence in the automotive sector. The agreement focuses on providing engineering and digital services, encompassing a wide range of activities crucial to the client’s next-generation vehicle development programmes. This includes support across the entire vehicle lifecycle, from initial design and prototyping through to manufacturing and beyond. Specific details about the exact services provided are currently being kept confidential to protect the client’s intellectual property.
The project’s duration is expected to span several years, providing LTTS with long-term revenue visibility and a strong foundation for future collaboration. This strategic partnership underscores LTTS’s capabilities in providing complex engineering solutions to leading global automotive companies. The company’s expertise in areas such as embedded software development, digital manufacturing, and data analytics were key factors in securing this lucrative contract. The deal further solidifies LTTS’s position as a trusted partner for innovation within the European automotive industry.
The €50 million deal is a testament to LTTS’s successful investment in building its capabilities and expanding its global reach. Securing contracts of this magnitude requires a significant commitment to research and development, a skilled workforce, and a strong track record of delivering exceptional results. The company’s commitment to quality and innovation continues to attract major clients from various industries, further driving growth and solidifying its position in the global market. This win is likely to have a positive impact on the company’s future outlook and overall investment appeal.
Financial Implications
The €50 million deal will undoubtedly have a significant positive impact on L&T Technology Services’ financial performance. This substantial contract represents a considerable boost to the company’s revenue stream over the next few years, providing increased financial stability and predictability. The long-term nature of the agreement ensures a consistent flow of income, mitigating some of the risks associated with shorter-term projects.
Analysts predict that the deal will contribute significantly to L&T’s overall earnings and profitability. The contract’s value, spread across several years, translates to a substantial annual revenue contribution. This will likely improve the company’s profit margins and enhance its overall financial health. The success of this project could also lead to further opportunities with the European auto manufacturer and potentially other clients in the automotive sector.
Furthermore, the €50 million deal is expected to strengthen L&T Technology Services’ investment appeal. The securement of such a large contract demonstrates the company’s ability to win and deliver major projects, boosting investor confidence. This, in turn, could lead to a higher valuation and a more favourable stock market response. The increased revenue and improved profitability should positively influence the company’s share price and attract further investment.
The financial implications extend beyond immediate revenue gains. The successful execution of this project will showcase L&T’s expertise and capabilities to potential clients, further enhancing its reputation and market position. This improved brand recognition and increased visibility could lead to more lucrative contracts in the future, creating a positive feedback loop for sustained financial growth. The long-term benefits of this deal are considerable, positioning L&T for continued success in the competitive global market.
Market Reaction
News of the €50 million deal sent ripples through the stock market. L&T Technology Services’ share price experienced a significant surge following the announcement, reflecting investor confidence in the company’s growth trajectory and its ability to secure major contracts. The market reacted positively to the long-term nature of the agreement with the European auto manufacturer, viewing it as a sign of sustained revenue and profitability for LTTS.
Analysts lauded the deal as a validation of L&T’s strategic investments in research and development, its skilled workforce, and its proven ability to deliver complex engineering solutions. The positive market reaction underscores the significance of this contract, not only for its immediate financial impact but also for its implications for future growth and market share. The deal significantly boosted investor sentiment, leading to increased investment in the company.
The €50 million deal’s impact on L&T’s share price is expected to be sustained, provided the project executes successfully. Continued positive news flow related to the project’s progress and the potential for further collaborations with the European auto manufacturer could further fuel investor enthusiasm and drive share price appreciation. The successful completion of this major project will reinforce L&T Technology Services’ reputation as a reliable and innovative partner within the automotive industry, attracting further investment and market opportunities.

April 2, 2025
MSME criteria revised

MSME criteria revised

The recent revisions to the MSME classification criteria, announced by Union Finance Minister Nirmala Sitharaman during her budget speech, represent a significant shift in how small and medium businesses are defined in India. The government’s aim is to streamline the process and provide better support to these vital contributors to the national economy. Key changes include a complete overhaul of the investment and turnover limits used to classify businesses as micro, small, or medium enterprises. These new limits are designed to reflect the current economic landscape and provide a more accurate representation of the size and scale of businesses operating within the MSME sector.

One of the most impactful changes is the move towards a more simplified classification system. The previous system, while well-intentioned, was often considered overly complex and difficult to navigate for many small business owners. The new system aims for greater clarity and ease of understanding, making it easier for businesses to determine their classification and access relevant government schemes and support. This simplification should lead to improved efficiency in the allocation of resources and reduce bureaucratic hurdles for MSMEs.

The notification detailing these changes came into effect on April 1st, marking a pivotal moment for the MSME sector. The specific investment and turnover limits have been significantly increased, allowing more businesses to qualify for MSME status. This increase in the thresholds reflects the government’s acknowledgement of the rising costs of doing business and the need for a more inclusive definition of MSMEs. This expansion is expected to positively impact a large number of small and medium businesses, offering them access to a wider range of benefits and support programmes.

The revised criteria also aim to address some of the ambiguities present in the previous system. By clarifying the definitions and providing clearer guidelines, the government hopes to reduce inconsistencies in classification and ensure that businesses are correctly categorized. This will lead to a more accurate assessment of the MSME sector’s contribution to the national economy and allow for better targeted policy interventions. The government believes these changes will ultimately foster growth and development within the MSME sector, creating a more vibrant and competitive business environment.
Impact on Businesses
The revisions to MSME classification will significantly affect businesses across India. Many small businesses will find themselves reclassified, potentially impacting their access to government schemes and financial support. Those businesses previously ineligible due to exceeding the old turnover or investment limits may now qualify for MSME status, unlocking a range of benefits. This could lead to increased access to credit, tax breaks, and government procurement opportunities.

Conversely, some medium businesses that previously qualified might now fall outside the MSME definition. This shift could mean a loss of certain advantages previously enjoyed, requiring them to adapt their strategies and explore alternative funding and support avenues. The impact will vary greatly depending on the specific industry, size, and location of the business. Businesses need to carefully review the notification and understand how the changes affect their individual circumstances.

The increased investment and turnover limits reflect the changing economic reality. The cost of doing business has risen, and the government acknowledges the need to adjust the criteria to accommodate this. The aim is to support businesses to grow and contribute to the national economy, but the transition might present challenges for some. Businesses should proactively assess their new classification and explore the available support and resources to ensure a smooth transition.

The simplification of the classification system is also expected to improve efficiency. The previous system was often criticised for its complexity. This simplification should reduce administrative burdens for both businesses and government agencies, leading to faster processing of applications and a more streamlined allocation of resources. Ultimately, the changes aim to foster a more supportive and efficient environment for small and medium businesses in India, driving economic growth and creating jobs.

The impact on businesses will depend on various factors. Larger businesses previously classified as MSMEs may need to adjust their strategies and access different funding sources. Smaller businesses newly classified as MSMEs will benefit from increased access to government support and schemes. The success of these revisions will depend on effective communication and support from the government to help businesses navigate these changes successfully. The April 1st notification marked a significant step in supporting the MSME sector.
Revised Investment Limits
The revisions to the MSME definition have led to a substantial increase in the investment limits used to classify businesses. These changes reflect the government’s recognition of the rising costs associated with establishing and operating a business in the current economic climate. The previous limits, often considered too restrictive, have been significantly raised, allowing a broader range of enterprises to qualify for MSME status. This expansion is intended to provide greater support to a larger number of small and medium businesses.

The specific figures for the revised investment limits are crucial for businesses to understand their new classification. The notification issued on April 1st details these new thresholds, separating micro, small, and medium enterprises based on their investment levels. Businesses should carefully examine these figures to determine their current classification under the revised criteria. This understanding is vital for accessing the various benefits and support schemes available to MSMEs.

This increase in investment limits is not merely a numerical adjustment; it represents a policy shift aimed at fostering economic growth. By expanding the definition of an MSME, the government aims to encourage entrepreneurship and support a larger segment of the business community. This inclusive approach seeks to empower more small businesses and contribute to a more robust and dynamic economy. The impact of this change will be felt across various sectors, potentially leading to increased competition and innovation.

The revised investment limits, alongside the changes in turnover thresholds, form a comprehensive approach to MSME classification. The government hopes that these changes will simplify the process of determining eligibility for various schemes and benefits. The ultimate goal is to create a more streamlined and efficient system, reducing bureaucratic hurdles and allowing businesses to focus on growth and development. The success of these revisions will depend on clear communication and effective implementation of the new guidelines.

The increased investment limits are a direct response to feedback from the MSME sector. Many small businesses felt the previous limits were outdated and did not accurately reflect the realities of operating a business in India. The government’s response demonstrates a commitment to listening to the concerns of the business community and adapting policies to better support their needs. This responsiveness is crucial for fostering a positive and collaborative relationship between the government and the MSME sector.
Eligibility and Classification
To be eligible for MSME status under the revised criteria, businesses must meet specific requirements regarding investment and turnover. The notification released on April 1st details these thresholds, clearly defining the boundaries between micro, small, and medium enterprises. These revisions aim to simplify the classification process, making it easier for businesses to understand their eligibility and access relevant support programs.

The new system uses a straightforward approach, eliminating ambiguities that plagued the previous classification system. This clarity should reduce confusion and ensure a consistent application of the criteria across all businesses. The government hopes this will lead to a more accurate representation of the MSME sector’s contribution to the Indian economy.

For small businesses, the increased investment and turnover limits represent a significant opportunity. Many businesses previously excluded from MSME benefits may now qualify, gaining access to government schemes, financial assistance, and other advantages. This broadened eligibility aims to foster growth and competitiveness within the sector.

Medium businesses, however, may experience a different impact. Some businesses previously classified as MSMEs might find themselves reclassified due to exceeding the new limits. This could affect their access to certain government programs. However, the government anticipates that the overall economic benefits from a more accurately sized MSME sector will outweigh any short-term adjustments needed by individual businesses.

The government’s aim is to create a more inclusive and supportive environment for all businesses. The revisions reflect a commitment to adapting the MSME classification to the evolving economic landscape. The simplified classification system, combined with increased investment and turnover limits, should lead to a more accurate and efficient allocation of resources to the businesses that need them most.

The new classification system encourages transparency and accountability. By providing clear and easily understandable guidelines, the government aims to minimise bureaucratic delays and streamline the process for businesses seeking to obtain MSME status. This improved efficiency benefits both the government and the businesses themselves.

Ultimately, the eligibility and classification revisions represent a significant step towards a more dynamic and supportive ecosystem for MSMEs in India. The government’s commitment to simplifying the process and increasing access to support reflects a broader strategy to promote economic growth and entrepreneurship.
Future Implications
The revisions to the MSME classification system, effective from April 1st, will have long-term consequences for the Indian economy. The increased investment and turnover limits, coupled with the simplified classification process, will undoubtedly reshape the landscape of small and medium businesses. The government’s aim is to foster a more robust and competitive environment, encouraging growth and innovation within the sector.

One significant implication is the potential for increased competition. With more businesses qualifying for MSME status, the market will likely see a surge in entrepreneurial activity. This increased competition could drive innovation and efficiency, ultimately benefiting consumers. However, it also presents challenges for existing businesses, necessitating adaptation and strategic planning to maintain their competitive edge.

The success of these revisions will heavily depend on the government’s ability to effectively implement the changes and provide adequate support to businesses navigating the new system. Clear communication and readily available resources are crucial for a smooth transition. The government will need to ensure that businesses understand the new criteria and can easily access the benefits associated with MSME classification.

Furthermore, the long-term impact on government policies and programmes designed to support MSMEs needs careful consideration. The expanded definition of MSMEs might necessitate adjustments to existing schemes to accommodate the increased number of eligible businesses. This will require efficient resource allocation and careful planning to ensure that the support reaches those who need it most.

Another key implication is the potential for increased foreign investment in the MSME sector. The revised criteria, with their higher investment limits, could attract more foreign investors looking to tap into the burgeoning Indian market. This influx of investment could further stimulate growth and development within the MSME sector, creating more jobs and contributing to economic expansion.

The long-term effects on employment are significant. The growth spurred by the revisions could lead to a considerable increase in job creation within the MSME sector. This would be a significant boost to the Indian economy, particularly in rural areas where MSMEs often form the backbone of local economies. However, monitoring the impact on employment will be crucial to ensure the positive effects outweigh any potential negative consequences.

March 24, 2025
High Returns and Government Support Drive AIFs to Explore SME-Focused IPOs

High Returns and Government Support Drive AIFs to Explore SME-Focused IPOs

Approximately 900 SMEs are now listed on the SME platforms of both the National Stock Exchange and the BSE, with significant traction observed over the past 2-3 years.
The recent success of Initial Public Offerings (IPOs) for Small and Medium Enterprises (SMEs), coupled with robust government support, has spurred Alternative Investment Funds (AIFs) to tap into this lucrative sector.
An AIF is a fund established or incorporated in India, functioning as a privately pooled investment vehicle.
Paradise Moon Investment Fund, an AIF, has announced its launch with the goal of raising Rs 750 crore over the next few years, targeting investors keen to leverage the growth of the SME market both pre- and post-IPOs. The fund aims to provide investors with a unique opportunity to benefit from the expanding Indian stock market and capitalize on the dynamic landscape of SME IPOs, according to an official statement.
With around 900 SMEs now listed on the SME platforms of both the National Stock Exchange and the BSE, significant traction has been observed over the past 2-3 years. Naveen Bansal, Managing Director of Paradise Moon, stated, “We seek to invite investment in Category 1 Alternative Investment Fund (AIF), with the visionary goal of becoming a leading investor in SME (pre and post) IPOs. The SME sector has witnessed notable expansion and development, contributing to a third of Gross Domestic Product (GDP).”
The BSE SME Index has delivered annualized gains of up to 195 percent over the past decade. A Rs 1,000 investment in September 2013 would be worth Rs 1.03 lakh in 2023, representing a 100x return, Bansal added.
Officials noted that the growth and returns in the SME sector are expected to surpass those of larger companies on the main exchange board due to concerns over stretched valuations.
As part of the ‘Aatmanirbhar Bharat’ package, the government announced a Rs 50,000 crore equity infusion for MSMEs through a Fund of Funds in July 2023 under the Self-Reliant India (SRI) Fund. Led by NSIC Venture Capital Fund, this initiative aims to provide equity funding to MSMEs with the potential and viability to grow into large enterprises. The government has provisioned Rs 10,000 crore, with the remainder coming from private venture funds.

August 1, 2024
Indian PE-VC Investment Declines in 2023; Manufacturing Sector Shows 20% CAGR Growth Over Two Years

Indian PE-VC Investment Declines in 2023; Manufacturing Sector Shows 20% CAGR Growth Over Two Years, Says Report

The manufacturing sector in India has emerged as a strong investment opportunity, with around $2 billion in investments growing at a 20 percent CAGR over the last two years (2021–23).
Indian private equity and venture capital (PE-VC) investments softened to approximately $39 billion in 2023, reflecting a global trend, according to a report by Bain & Company. Traditional sectors such as manufacturing, healthcare, and energy demonstrated resilience, accounting for about 75 percent of investments in 2023, up from 60 percent in 2022.
The growth in the manufacturing sector, driven by supply chain diversification, government incentives, and the availability of scale assets, was highlighted in Bain & Company’s annual ‘India Private Equity Report 2024’, created in collaboration with the Indian Venture and Alternate Capital Association (IVCA).
With electric vehicle (EV) penetration in India expected to reach 40 percent by 2030, original equipment manufacturers (OEMs) dominated more than 70 percent of deal value in the past year. Significant investments (over $100 million) were made in companies such as Ola Electric, Ather Energy, Mahindra EV, and TI Clean Mobility. Additionally, packaging saw substantial deals in globally competitive companies with strong export performance, including Polyplex and Tufropes, both generating over 70 percent of sales from exports.
Gustaf Ericson, Associate Partner at Bain & Company, stated, “Advanced manufacturing is expected to see increased deal activity in the near to mid-term, driven by China+1 tailwinds, government incentives like PLI, and the emergence of scaled assets across multiple segments. We expect electronic manufacturing services, packaging, and EV players to benefit significantly from this favorable environment in the coming years.”
Despite a temperate outlook for India PE-VC dealmaking in 2024 due to global macroeconomic stabilization, traditional sectors such as advanced manufacturing are poised to attract substantial investments. This is attributed to positive fundamentals, supportive policies (like production-linked incentives and tax incentives), and the growth of scale assets across various sub-segments.
The EV market is anticipated to experience robust deal activity, especially in OEMs with scale assets planning capacity expansions or new product launches, as well as in charging infrastructure and battery-swapping players looking to expand geographically or into new EV segments.
Key investment drivers are expected in plastics, secondary paper, and glass, propelled by the F&B industry’s demand for premium, lightweight, cost-effective plastics, and the e-commerce sector’s shift towards sustainable packaging. Revenues for India-based packaging companies are projected to grow at around 10 percent CAGR between 2023-27.
Electronics production in India is forecasted to grow at a 25 percent CAGR over 2023-27, with mobile phones, IT hardware, and consumer electronics being the most attractive sub-segments for deal activity. This growth is driven by increased smartphone and consumer durable penetration, faster replacement cycles, significant export uptake by leading players, increased backward integration (e.g., into components), and a favorable duty structure for import substitution.
Additionally, global supply chain diversification is likely to benefit Indian manufacturers in export-oriented sectors like electronics, pharmaceuticals (especially APIs and CDMOs), and chemicals (specialty chemicals and agrochemicals), given their globally competitive scale and robust government support.
The Bain & Company report also noted that India-focused funds are increasingly diversifying across various sectors. Leading funds entered new sectors from 2021–23, with manufacturing, healthcare, new-age tech, and SaaS attracting the most new investments.
In 2023, India saw $29.6 billion in PE investments during a subdued year for private equity globally, marking an 18 percent drop from 2022’s peak value of $36 billion. PE accounted for around 75 percent of total PE-VC deal value, driven by large-scale deals for high-quality assets. VC investments dropped significantly to $9.6 billion in 2023 from $25.7 billion in 2022, as investors prioritized unit economics over growth and recalibrated strategies amid macroeconomic challenges.

May 29, 2024
Considering Investment in Manufacturing? Opt for a Staggered Approach

Considering Investment in Manufacturing? Opt for a Staggered Approach

Financial planners are advising investors bullish on India’s manufacturing sector story to consider investing in HDFC Asset Management’s Manufacturing Fund, but they recommend spreading the investment over 12 months instead of making a lump sum investment at this time. First-time investors, however, may want to skip this fund launch.
The NFO (New Fund Offer) of HDFC Manufacturing Fund, managed by Rakesh Sethia, is currently open and will close on May 10. Investors can start with as little as ₹100 in this fund, which will be benchmarked against the Nifty India Manufacturing TRI Index. An exit load of 1% will be charged for redemptions made within a month of investment.
“Core sector manufacturing is poised for significant growth driven by government policies, technological advancements, and rising demand,” says Rajat Dhar, managing partner at Finogent Solutions. “Investors seeking to diversify their equity holdings beyond sectors like finance and technology can consider this fund and distribute their investments over the next 6-12 months.”
At least 80% of the scheme’s portfolio will be allocated to shares of sectors such as capital goods, oil & gas, auto, healthcare, consumer durables, metals and mining, chemicals, textiles, and construction materials.
Financial planners are cautioning new investors against rushing into thematic funds. “Investors should first build a core portfolio of diversified funds before exploring thematic funds,” advises S. Shankar, CFP, from Credo Capital.

Originally posted on: https://economictimes.indiatimes.com/mf/analysis/bullish-on-theme-manufacturing-go-for-staggered-investment-plan/articleshow/109708560.cms?from=mdr

April 30, 2024