$2B ADGM fund to invest in India's semi-conductor, electronics industries

Dubai - Group aims to raise $1.5B from GCC; $500M already secured from consortium of investors

India's Next Orbit Ventures ESDM is looking to raise $2 billion (Dh7.34 billion) from the UAE and other GCC entities and investors as part of feeder fund to invest in the semi-conductor and electronics facilities in the South Asian country.
The sector-focused fund - Next Orbit Ventures Fund II - has been registered with Abu Dhabi Global Market (ADGM) and will also be regulated by the Indian regulator Securities and Exchange Board of India (Sebi). Ajay Jalan, founder and managing partner at Next Orbit Ventures ESDM, said they have received confirmation of up to $650 million from the UAE-based sovereign wealth funds (SWFs).
"We will be regulated by two jurisdiction for transparency and protection of GCC investors. This amount will go to India fund and then it will get invested in to more than 50 companies," Jalan said.
The closed-ended venture capital with seven-year tenure is projected to offer 24 per cent annual return in Indian rupee terms.
"Both regulators asked us not to give guarantee on any returns but based on our previous experiences we feel this fund can offer 24 per cent annual return in Indian rupee terms," he added.
UAE-based IBMC Finance Professionals Group is the placement partner. Jalan said that with the help of IBMC, they have met 18 SWFs in the UAE and the amount of funds coming through SWFs is approximately $650 million.
The group aims to raise $1.5 billion from the GCC region while the remaining $500 million has already been secured from a consortium of investors involving both the Indian government and ultra high net worth individuals.
In 2017, the Indian electronics market size will be estimated at $140 billion with roughly 90 per cent to be imported and 10 per cent to be assembled. As per Indian government estimates, the industry will reach $400 billion by 2022. In 2016, India imported nearly $45 billion worth of electronic goods and components.
Next Orbit Ventures has tied up with global technology providers including UMC of Taiwan, AMD and TowerJazz of the US, and Centrothem PV of Germany as technology licencees for its fab projects.
Jalan said the project's proposal was submitted for the planned fab projects to the Indian government in August 2017 and talks are also underway with Andhra Pradesh and Gujarat governments to secure the land for the project.
"Because of the foreign currency pressure and cyber-security, government of India is supporting by contributing 50 per cent of the capex amount. The whole idea behind the digitisation is that semi-conductor should be made in India because that is where the cyber security can be protected," he added.
- waheedabbas@khaleejtimes.com

• India