India’s next multi-billion dollar companies will come from…: Hiren Ved on his big bets

India's manufacturing potential no less than a renaissance post-Covid, for Hiren Ved, Alchemy Capital's Dir & CIO

Alchemy Capital’s Hiren Ved believes that India is now picking up pace and is on the way to become a significant player in the manufacturing sector. A renaissance in the manufacturing sector could provide multi-million dollar opportunities in new and emerging sectors, he says, adding that such renewed focus on manufacturing is coming after a decadal slowdown.

“India has been very strong in services. This is evident from the fact that our export of services has surpassed our export of manufacturing. But we are still finding our footing in manufacturing,” said Ved while speaking exclusively to Moneycontrol about his five big ideas for investing in 2025.

The well-known market expert is also bullish on emerging opportunities in electronics, defence and space tech.

Betting on innovation
Talking about opportunities in these emerging spaces, Ved said that electronics, defence and space tech segments are in a position where we could potentially see small companies eventually become multi-million dollar market cap companies. “Maybe some of them will become multi-billion dollar market cap companies too,” he says.

He explains that historically, electronic manufacturing, which mostly involves low-end assembly and components, has always moved to the geographies where the costs are lowest but this is now changing and is now coming to India.

“In case of electronics, we’re seeing domestic manufacturing replace imports. The government is also looking at reducing imports of IT hardware, with aspirations to increase domestic production of laptops, PCs, tablets, and telecom equipment. As China recedes from the telecom space, there’s an opportunity for Indian companies to become global leaders in 4G, 5G, and even 6G technology," said Ved.

This shift he believes could provide a huge opportunity – potentially worth $70-100 billion.
Given that Indian companies in this space are still relatively small, Ved believes that 20 to 25 companies will emerge in the electronics manufacturing space in segments raging from semiconductors to mobile phones. “The ecosystem is coming to India, and Apple’s initial move to establish a presence here is helping build that ecosystem,” he said.

It is similar to the times lived before, he says. “Back then, there was not just one Wipro, Infosys, or TCS; there were many software companies that grew rapidly. Likewise, we will have several companies emerging from this electronic manufacturing space, from low-tech products like refrigerators and air conditioners to high-tech ones such as aerospace and defence,” he said.
On aerospace and defence, Ved says that India has been an importer but going ahead we will see more domestic production.

Currently Ved owns the top two companies in the EMS space, and he believe more will emerge from this sector. In defence, he added that they own the leaders, but there are also smaller players in the supply chain that show promise.

He also sees significant private equity and venture capital backing early-stage companies in drones, simulation software, and various areas within defence, aerospace, and space tech. Many of these companies, according to him, will likely go public in the next few years, offering more investment opportunities. “Right now, we’re playing these sectors through the leaders, but there will be more that will emerge over time,” he said.

While Ved believes that the new areas provides investing opportunities, the traditional spaces are not lagging. “We have always been strong across the traditional sectors – automotive, auto components, pharmaceuticals (particularly generics and CDMOs), chemicals, and engineering goods. Indian companies have been part of the global supply chain in these areas for a long time.”

“The term 'China plus one' is now commonly used, but India has had strength in these sectors for quite some time. I firmly believe that this will continue, and it's not going away,” he said.