Next Orbit Ventures (NOVF), a Mumbai-based venture capital firm focused on electronic system design and manufacturing (ESDM) sector, gets commitment visibility from UAE investors for its $750 million plus (INR 5,000 crore plus) fund which will be invested in digital, analog and solar fabrication (fabs) projects along with semiconductor design, electronics, led and solar products to feed those fabs.
Next Orbit has been raising the fund from investors in India and abroad. The investors from UAE International Investors’ Council which includes 18 UAE entities like Mubadala, DP World, Etisalat, Emmar etc. have shown keen interest in investing in this fund & its project. 49% of the commitment is expected from the Government of India (GoI), as NOVF has already been selected as the ‘Daughter Fund’ under GoI’s Electronics Development scheme and for investing in the strategically important project for the country to reduce its electronics imports which can reach $ 300 bn from current $ 90 bn in 2020.
Ajay Jalan, founder and managing partner at Next Orbit, said, “This investment spree in India follows the ‘Digital India’ and ‘Make in India’ programs of the Government of India which are providing economic, skill development and tax incentives to electronics manufacturing. The project will provide more than 28 million jobs in the country and also will be second source of quality supply of electronic, LED and solar products which is currently dominated by cheap Chinese products.”
Dubai-based IBMC Financial Professionals Group is the advisor to this second $750 million ESDM fund for Gulf Cooperation Council (GCC). The firm launched its second fund in November to invest mainly in firms that make semiconductor chips, and solar and LED components.
NOV has already committed to seed invest $100 million (INR 700 crore) equity investment in the first phase equity of $5.6 billion digital fabs in technical collaboration with AMD of USA and ST Microelectronic of France. The project will come at Prantiz near Ahmedabad, Gujarat. GoI has identified 1,200 acres of land in Prantiz and has already started developing the necessary infrastructure to make it a manufacturing hub.
“We are coming as first investors into this fab project to back India’s growing electronics market, which will reach $400 billion by 2020 as per the estimates of Government of India’s national policy of electronics 2012, and requires $100 billion of investment for achieving ‘zero import’ target,” said Ajay Jalan, who was instrumental in drafting Government of India incentive policy in 2007 for semiconductor manufacturing.
Fabrication units are facilities where semiconductor devices and chips are manufactured. Chips made in India will make electronics manufacturing cheaper than imported, dutiable gadgets and support the economy.