Kedia set to invest Rs.400cr fund in Tier-II & -III cities
Given the Indian Government’s generous incentives bounties, the manufacturing sector should embrace technology and become a “Silicon Valley” to attract global sovereign funds as an increasing number of these cash-flush investors’ consider India for being among the top markets, offering higher rate of returns.
These market sentiments were presented by Bangalore-based industrialist-turned-investor Ankit Kedia of Capital-A, who said, “Eventually, we should build Indian manufacturing startups that expand abroad as part of our future plans, as we want to make products for the world with a home-grown Silicon Valley-type ecosystem.”
However, technology must be made affordable for these usually cash-strapped manufacturers, mostly micro-small and medium level enterprises operating in lower-cost environments in Tier-II and Tier-III cities, Kedia said at the Super AI conference and exhibition held June 18–19 in Singapore.
Bangalore should now focus on manufacturing, especially by leveraging advanced technologies such as Artificial Intelligence for just as the city has been recognized as a technology hub and dubbed India’s Silicon Valley for accommodating both local and international technologists as well as tech-driven corporations, he pointed out.
Kedia, currently working on a Rs.400 crore Fund-2 under his five-year-old Capital-A, believes the Indian manufacturing sector will grow over the next 15 years, and build a strong foundation across the country, starting with low-cost factories in Tier-II and Tier-III cities.
With two decades of experience in various industries and five years of running Capital-A Fund-1, Kedia wants to see technology-led manufacturing enterprises in the country, saying he wants to combine the sector with his long-term investment horizon of 15 to 20 years.
Kedia explored opportunities for the use of AI in manufacturing at the Super AI show and has returned home to raise Rs.400 crore for Fund-2, which will be strategically invested in factories in Tier-II and Tier-III cities such as Amritsar, Pune, Ahmedabad. “We want hardware producers in these cities to form the foundation of our future manufacturing ecosystem and to share prosperity across the country,” he said.
Kedia says that India’s large consumer market, along with the government’s aggressively promoted Production Linked Incentives (PLIs) scheme, provides further confidence to investors to support small and medium-sized software or hardware manufacturers, who will have a low-cost advantage when competing globally.
Kedia also sees international sovereign funds moving to India for better returns on investment, especially as they face pressure from global uncertainties that are impacting economic prospects through disruptions to supply chains and tariffs on trade.
Capital-A Fund-1 has reported an Internal Rate of Return (IRR) of 28% and is being tracked at 1.8X. Kedia said, “Such fund returns are becoming more and more attractive to sovereign funds in Europe and the United States.”
Said the fund manager, who invested Rs.120 crore under Fund-1 across 25 investments five years ago, “The strong domestic market, the stability of the Indian ecosystem, and the potential of leveraging an increasing number of Free Trade Agreements between India and international markets are all plus points for our manufacturing sector.” Fiinews.com
