The 18-year-old company sees exponential growth opportunity due to the scale of India’s electronics market, as a result of which it hopes to ramp up its portfolio in the country, Vivek Bansal, cofounder and president of VVDN Technologies, said in an interview on the sidelines of the India Mobile Congress on Wednesday,
Bansal said the company has already applied for the Centre’s electronics component manufacturing scheme (ECMS) for component subsidies, which will make a significant difference in terms of the returns to capital expenditure that it plans to make.
“We have full-fledged plans to commence bare printed circuit board (PCB) manufacturing in India as well as display manufacturing locally. In the long run, we also plan to manufacture capacitors, resistors and other such components—for which India still relies on imports. Eventually, our goal is to achieve backward integration, or locally manufacturing the full value chain of electronics instead of just low-margin, low-value assemblies,” Bansal told Mint.
Classified as an original design manufacturer, Manesar, Haryana-based VVDN Technologies currently assembles telecommunications and enterprise technology infrastructure such as networking switches, radio access networks, routers, and Internet of Things (IoT) devices—and also manufactures some components locally.
On 18 April, the company unveiled a new assembly line to locally put together enterprise-grade laptops for Taiwanese brand, Asus, expanding into a new category.
The company loosely counts contract manufacturers Dixon Technologies, Syrma SGS and Kaynes Technology as its closest competitors. It is eyeing a public listing in the near future, Bansal said.
Need for scale
“Each of the component manufacturing plans that we have will need considerable capital investment to ramp up to scale. Without scale, there is no profitability or impact across the market,” he said. “For instance, a bare PCB manufacturing facility will need us to invest at least $10 million upfront and $100 million—minus incentives—to bring them up to scale. This is what we need the capital for, and once we are sanctioned for the Centre’s incentives, we will… accelerate our plans for a public listing in the next 18-24 months.”
India’s $2.7 billion ECMS outlay, notified in April, has received a warm response from the industry. On 2 October, union IT minister Ashwini Vaishnaw said that within the scheme’s first deadline of 30 September, the Centre received 249 applications with total proposed investments of $13 billion—up from the government’s initial projection of $6.7 billion. Vaishnaw affirmed that about 90% of all applicants were from India. VVDN, Bansal affirmed, is one of them.
The company’s focus on local component manufacturing comes as the Centre makes a concerted push to increase the percentage of parts that are sourced domestically, a move that would increase India’s net earnings from manufacturing devices for the world.
“We are seeing a slow but steady rise of localisation across networking gear as well. For instance, in an enterprise network router, up until three years ago, the domestic value generation from assembling it was less than 14%. Today, this is up to over 40% already. This represents a massive market within India itself, where the market for IoT hardware such as smart electricity meters represents a major revenue opportunity for us as a manufacturer,” Bansal added.
Revenue growth
VVDN’s latest financials, sourced via data analytics firm Tofler, showed that the company generated net revenue of ₹2,145 crore ($242 million) in FY24. On 22 November, enterprise ratings company Crisil said in a client note that VVDN had already clocked ₹1,874 crore ($211 million) in revenue in the first six months of FY25 and was on track to scale up to ₹3,800 crore ($428 million) by 31 March this year. The company is yet to file its FY25 earnings.
“We’re operating joint ventures across North America and the Middle-East as well, and our revenue share between domestic and foreign markets is 50-50 right now. There is an unlimited opportunity for growth here, and we’re looking at our revenue to even triple within the next five fiscals,” Bansal said.
Industry stakeholders said the company has retained strong fundamentals. According to them, component manufacturing for telecom equipment, networking and electronics will receive heavy investor interest and government backing in the next few years because of multiple factors. The biggest of them is the size of the Indian market, which remains under-penetrated in terms of localisation of components.
“As this increases, all stakeholders of the electronics ecosystem are likely going to gain big—including folks like VVDN, who have been in the industry for quite some time now,” said Ashok Chandak, president of India Electronics and Semiconductor Association.
Harshit Kapadia, vice-president at brokerage firm Elara Securities India, added that VVDN’s approach is on the right track.
“Local component manufacturing is something that all companies, including the larger listed ones, will get into, and each of them will apply for the Centre’s incentives as it would help boost their margins. Right now, most EMS operations are assemblies, which does not add much local value. Companies will also gain from making components that will find usage across sectors, and not be restricted by seasonal demand—such as displays and circuit boards,” he said.
