The semiconductor industry has been in the limelight in recent years due to its soaring demand and the persistent global shortage of chips, making it a favoured investment sector for investors looking for high growth.
Adding to this excitement, Qualcomm Inc., a global semiconductor giant, has announced plans to outsource the manufacturing of semiconductor chips in India.
The company aims to capitalise on its substantial scale and the need for high chip volumes by collaborating with key industry players to introduce state-of-the-art technology in the country.
This development has piqued the interest of investors, intensifying the focus on semiconductor IPOs, as investors eagerly anticipate opportunities in this thriving industry.
In alignment with this trend, an Indian opto-semiconductor manufacturer, Polymatech Electronics, has filed for an IPO and it looks to go public soon.
Polymatech Electronics is an India-based semiconductor chip manufacturer.
The company designs, manufactures, and supplies opto-semiconductor chips and luminaries to a wide range of industries, including lighting, medical devices, data transmission, and specialised lighting.
The company was founded in 2007 and is headquartered in Chennai, Tamil Nadu. Polymatech has a state-of-the-art manufacturing facility in Oragadam, Tamil Nadu, which has a capacity of 300 million (m) chips per annum.
Its clients include Fortune 1,000 multinational corporations.
The company submitted its Draft Red Herring Prospectus (DHRP) to the market regulator last month on 6 October 2023.
However, the crucial details related to the IPO are yet to be disclosed.
The company has achieved remarkable revenue growth, registering a compounded annual growth rate (CAGR) of 139.9% between the financial years 2021 and 2023.
This growth is evidenced by the increase in revenue from operations, which shot up from Rs 450 million (m) in FY21 to Rs 6,490.2 m in the financial year 2023.
While the net profit has increased at a CAGR of 198.8% during the same time.
This remarkable performance can be credited to the growing customer base and backing from government.
Particulars | 31-Mar-21 | 31-Mar-22 | 31-Mar-23 |
---|---|---|---|
Revenues (Rs in m) | 450.1 | 1,258.70 | 6,490.20 |
Revenue Growth (%) | - | 179.6 | 415.6 |
Net Profit (Rs in m) | 62.8 | 342.6 | 1,677.60 |
Net profit margin (%) | 13.9 | 27.2 | 25.9 |
Looking ahead, the company has plans to expand its business to international markets. It intends to focus expansion primarily in North American, European, Middle East, and South East Asian markets.
The opto-semiconductor market presents a substantial growth opportunity, with a total addressable market projected to reach US$ 2.2 trillion (tn) by 2030, significantly surpassing its current size of around US$ 1.35 tn. This bodes well for Polymatech's position within the Indian semiconductor sector.
The government's ambitious Semicon India Program, launched under the India Semiconductor Mission (ISM), signifies a concerted effort to foster semiconductor and display manufacturing in India, with a substantial financial allocation of Rs 760 bn.
In September 2022, the scheme was further refined based on industry feedback, resulting in the launch of the Modified Semicon India Programme, maintaining the Rs 760 bn investment commitment to strengthen India's sustainable semiconductor and display manufacturing ecosystem.
Moreover, in addition to the Semicon India Programme, the government is set to introduce the Design-led Manufacturing (DLM) Program, aimed at promoting semiconductor design and manufacturing within the country.
Nonetheless, it's important to acknowledge that like any investment opportunity, Polymatech Electronics presents its own unique set of advantages and disadvantages that potential investors should consider.
The Indian semiconductor industry stands at the cusp of transformation, poised for significant growth and influence on the global stage. For more, check out our editorial India's Semiconductor Dream: Is It Becoming a Reality?
And for more information on IPOs, check out the list of upcoming IPO's.
Until next time...
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