Growth equity platform Singularity AMC sees some of the sectors where the private equity fund is investing growing ten-fold, with the possibility of a $100 billion market capitalisation over time. The AMC sees strong export potential is spaces like medical devices, as well as electronics manufacturing and energy transition.
The Singularity Growth Opportunities Fund II (SGOF II), which was recently oversubscribed at Rs 1,800 crore, in already invested in eight companies, including the likes of Lohum (battery recycling), HEG (diversified energy transition), Sterling & Wilson Data Centre, Classic Legends (which owns JAWA motorcycles), among others.
In a conversation with Moneycontrol, Yash Kela, the founder and CIO of Singularity AMC said sectors such as medical devices and electronics are at an inflection point.
Edited excerpts:
Q. SGOF II is already deployed across multiple companies. But what stood out was your mention of the goal to build $100 billion sectors. Could you give us context for that?
We are committed to 10 to 11 sectors from a strategic autonomy standpoint. I think it solves a lot of problem statements around value-added employment for 140 crore Indians. It also reduces our dependency on external countries or supply chains — and helps us become a product country and a net exporter. These sectors can become $100 billion in market cap over time. That’s the scale we are thinking about — it’s not about individual companies becoming $100 billion. It’s about helping build entire ecosystems. We believe these sectors can grow 10x. Some of them are already around $7 to 10 billion, others like electronics are at $113 billion — that can go to $400 to 500 billion. Medical devices is a $12 billion category, out of which we import $10 billion. Globally, it's a $500 to 600 billion market. We think India can become a net exporter there. The right enablers are falling into place — and that’s where we’re focused.
Q. In terms of where you're putting capital, is there a prioritisation within these sectors?
Yes, we are largely focused on energy transition, next-gen industrials, and consumer.
Q. Eight companies have been backed so far. Could you share a bit more on that portfolio and what's driving returns?
Yes. From SGOF II, we’ve already invested in eight companies — Lohum (battery recycling), HEG (diversified energy transition), Sterling & Wilson Data Centre, Sabine (integrated IVF platform), Classic Legends (which owns JAWA motorcycles), Qucev (electric vehicle manufacturer). We’re targeting 12 to 15 companies in total over two years, with average cheque sizes of Rs 75 to 175 crore. Returns have been above our normal private equity IRRs. We’ve been able to deliver more than 30% IRR and we feel that should continue.
Q. You’ve said before that some of these sectors need to be built from scratch. What’s the model you’re using for that?
Some companies we invest in have existed for decades — like Waaree, which started in 1987 and only scaled post-2021. They kept costs low, had a product-first approach, and strong technology. Others are doing tech partnerships, solving for Indian customers, and starting to export. The growth is real, and margins are healthy. Our thought process is not services-first, it's product-first. We follow three approaches: one is classic growth private equity. The second is building out businesses from scratch. Let’s say a solar inverter or EV commercial vehicle platform — we may partner with a global tech firm, bring in an operating partner, both put in capital, set up a new plant with a strong team. These projects typically require around $300 million per company. And within 3 to 4 years, they can start generating strong EBITDA, solve for domestic demand, and support exports. If it works, the businesses can trade at decent valuations, and we can make 6x, 7x, even 10x on our capital. About 30% of our portfolio is in these built-out projects. The remaining 70% is more traditional PE.
Q. The fund structure was described as designed for faster DPI. Can you explain that?
Yes — SGOF II is structured with a specific mix to enable faster DPI (Distributions to Paid-In capital). Over 40% is allocated to late-stage companies, another 40% to profitable growth-stage firms, and 20% to high-conviction operating ventures. The idea is to get cash returns flowing earlier while still backing long-term compounders. As of now, the portfolio is valued at Rs 492 crore and has achieved a 1.2x MOIC.
Q. Are you seeing enough deal flow in these strategic areas? Or are valuations getting overheated?
We think these sectors have a strong strategic tailwind. The deal flow is good. A lot of it is proprietary — which means we’re able to get in at decent valuations. It’s not like the hyper-competitive bidding environment you see in SaaS or consumer tech sometimes.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
