Ola Electric IPO Sees Strong Demand Despite Falling Grey Market Premium
The Ola Electric Mobility IPO witnessed robust interest, achieving a subscription rate of over four times on the third day of bidding. The employee section topped the subscription chart at 8.98 times, while the retail and non-institutional investor categories saw subscriptions of 2.87 times and 1.11 times, respectively. The qualified institutional buyer segment was subscribed 40%. In total, 49.43 million bids were received against the 46.51 million shares offered, resulting in a 1.06 times subscription rate. The IPO aims to raise ₹6,145 crore with a price band set between ₹72 and ₹76 per share.
Despite the positive subscription figures, the grey market premium (GMP) for Ola Electric shares fell to ₹2.50, signaling a less enthusiastic response compared to initial expectations. Analysts at LKP Securities and Choice Equity Broking expressed cautious optimism, advising investors to subscribe while monitoring market dynamics and the company’s financial health. The IPO includes a fresh equity issuance of ₹5,500 crore and an offer for sale of 8.49 crore shares. Proceeds will be used to pay down debt, support growth initiatives, and expand production capacities.
Editor’s Note: The Ola Electric Mobility IPO saw strong demand, with subscriptions exceeding four times the shares offered and notable interest from employees, retail, and non-institutional investors. Despite this robust interest, the grey market premium for the shares fell to ₹2.50, indicating a more tempered response than initially anticipated.
Zetwerk and SMILE Electronics to Launch Three IT Hardware Factories in India
Zetwerk Manufacturing Businesses has partnered with SMILE Electronics to establish three new IT hardware production facilities in India. The partnership will see the launch of a fully automated factory near Bengaluru in Devanahalli, designed for the assembly, testing, and packaging of desktops, laptops, energy meters, and remote controls. Additionally, Zetwerk will invest ₹1,000 crore to enhance electronic system design and manufacturing (ESDM) capabilities across the country. This collaboration strengthens SMILE’s footprint in South India with two new factories in Chennai and Andhra Pradesh, adding to their existing facility in Bengaluru.
Zetwerk operates four factories in North India, catering to demand for mobile phones, telecom devices, smart meters, television and display devices, and wearable technology. Mukesh Gupta, Chairman of SMILE Electronics, emphasized the strategic partnership with Zetwerk, highlighting the potential to expand production capabilities and become a leading Indian ESDM player. Rahul Sharma, Co-founder of Zetwerk, noted that the collaboration aims to accelerate the domestic electronics ecosystem, creating significant employment opportunities and contributing to India’s goal of becoming a global manufacturing powerhouse. SMILE Electronics is a beneficiary of the government’s IT hardware Production Linked Incentive (PLI) schemes, having produced and supplied millions of electronic devices over the past three years.
Editor’s Note: Zetwerk Manufacturing Businesses and SMILE Electronics are set to launch three new IT hardware factories in India, including a fully automated facility near Bengaluru for desktops, laptops, and other electronics. Zetwerk will invest ₹1,000 crore to boost electronic system design and manufacturing (ESDM) capabilities, complementing SMILE’s expansion with new plants in Chennai and Andhra Pradesh. This partnership aims to enhance India’s electronics production, create jobs, and support the nation’s goal of becoming a global manufacturing leader.
India Seeks to Assure Taiwan of Stable Policies to Attract Semiconductor Investments
India is actively working to assure Taiwanese businesses and government officials of policy stability to bolster its semiconductor sector, as senior officials from the Indian IT Ministry met with executives and government representatives in Taipei. These meetings, held in June, aimed to provide assurances of consistent support for investments in semiconductor manufacturing, particularly regarding stable import regulations and customs duties. This outreach comes as Tata Electronics prepares to open India’s first commercial semiconductor fabrication plant in Gujarat, with technical support from Taiwanese chipmaker PSMC. Although PSMC, a smaller player in the Taiwanese market, has opted for a technology collaboration without equity investment, India hopes that sustained engagement with Taiwanese firms will eventually lead to deeper investments, such as equity partnerships or independent operations.
The strategic importance of engaging with Taiwan stems from its dominant role in the global semiconductor industry, with companies like TSMC and UMC leading the charge. Taiwan produces over 90% of the world’s advanced chips, vital for electronic devices and AI technologies. However, Taiwanese firms have been cautious about investing in India due to perceived challenges, such as administrative complexities, high tariffs on electronic imports, and a lack of experienced engineers. Joseph Wu, Taiwan’s Foreign Minister, highlighted the need for India to streamline its administrative processes and build an integrated semiconductor ecosystem to attract significant investment. Despite these hurdles, India’s IT Ministry remains confident in the country’s talent pool and is optimistic about attracting global players to invest in its semiconductor ambitions.
Editor’s Note: India is working to assure Taiwanese businesses of stable policies to attract semiconductor investments, as senior IT Ministry officials met with Taiwanese executives in Taipei to discuss support for semiconductor manufacturing. This initiative comes ahead of Tata Electronics’ launch of India’s first commercial semiconductor plant in Gujarat, supported by Taiwanese chipmaker PSMC. Despite challenges such as high tariffs and administrative complexities, India aims to build a robust semiconductor ecosystem and is hopeful that ongoing engagement will lead to deeper investments from Taiwanese firms.
GTRI Proposes Strategic Reforms to Boost India’s Appeal for Foreign Investments
The Global Trade Research Initiative (GTRI) has outlined a four-step plan to enhance India’s attractiveness to global investors, highlighting the country’s need for strategic reforms despite its significant potential. GTRI emphasized that India’s Foreign Direct Investment (FDI), which totaled $44.4 billion in FY2024, represents only 1.1% of its GDP and falls short compared to major economies like China and Brazil. To improve this, the think tank recommends reducing cost disadvantages associated with relocating to India, such as high labor, raw material, energy, and financial costs. GTRI also stressed the importance of streamlining the Ease of Doing Business and establishing a robust framework for evaluating investment proposals.
Key recommendations include addressing India’s high raw material costs and financial expenses, which are considerably higher than those in China and Vietnam. GTRI suggests identifying priority sectors for development, inviting leading global firms to drive technological innovation, and improving logistics through dedicated freight corridors and strategic industrial zone placements. Additionally, creating a framework to assess investments, particularly those involving technology transfer, is crucial for enhancing India’s technological capabilities and competitiveness in the global market.
Editor’s Note: The Global Trade Research Initiative (GTRI) has proposed a four-step plan to make India more appealing to foreign investors by addressing cost disadvantages and improving the Ease of Doing Business. With India’s Foreign Direct Investment (FDI) at $44.4 billion, representing only 1.1% of GDP, GTRI recommends reducing high labor, raw material, and energy costs, and streamlining investment evaluation processes. Key suggestions include targeting priority sectors, inviting global firms for technological innovation, and enhancing logistics through dedicated freight corridors and strategic industrial zones.
Indian Government Begins Disbursing Funds to Micron Under Semiconductor PLI Scheme
The Indian government has commenced the disbursement of funds to US-based semiconductor giant Micron as part of its Production-Linked Incentive (PLI) scheme, aimed at bolstering the domestic semiconductor industry. According to MeitY Secretary S Krishnan, the disbursement process for Micron and other firms, including Tata, has begun, with Micron expected to commence manufacturing by December next year. Both companies will receive 50% of their incurred costs on a quarterly basis under the modified assembly, testing, marking, and packaging scheme. This initiative follows the government’s 2021 launch of the PLI scheme with a budget of INR 76,000 crore to support the semiconductor and display manufacturing ecosystem.
The PLI scheme, which has already committed INR 70,000 crore to various fab players, was revised in September 2022 to provide uniform support across technology nodes. This move aims to attract major investors to India’s semiconductor sector, which has recently seen significant developments, including Micron’s investment exceeding INR 22,000 crore for an ATMP plant in Gujarat and other global semiconductor giants establishing manufacturing units in the country. The Union Budget 2024-25 also outlined measures to further boost the manufacturing ecosystem, including reductions in customs duties for semiconductor inputs.
Editor’s Note: The Indian government has started disbursing funds to Micron under its Production-Linked Incentive (PLI) scheme, aimed at strengthening the domestic semiconductor industry. Micron, along with Tata and other firms, will receive 50% of their incurred costs quarterly and is expected to begin manufacturing by December next year. This initiative is part of a broader strategy, including the revision of the PLI scheme and budget allocations, to attract major investors and boost India’s semiconductor ecosystem.
Taiwanese Comtrend Opens New Office in Haryana to Boost ‘Made in India’ Wi-Fi Products
Taiwanese broadband and networking solutions provider Comtrend has inaugurated a new office in Haryana as part of its strategy to deliver indigenously manufactured Wi-Fi gear to both domestic and global markets. The expansion includes establishing a research and development (R&D) department and overseeing commercial and manufacturing activities through its Indian subsidiary. The new office will act as a strategic hub for Comtrend, enhancing its service delivery and providing tailored networking solutions to meet the specific needs of the Indian market.
Comtrend plans to leverage this expansion to forge partnerships with local businesses, technology partners, and educational institutions, facilitating technology exchange and development. This move underscores the company’s commitment to strengthening its presence in India and contributing to the local tech ecosystem by offering products made in India.
Editor’s Note: Taiwanese broadband provider Comtrend has opened a new office in Haryana to support the production and distribution of ‘Made in India’ Wi-Fi products. The expansion includes establishing an R&D department and overseeing commercial and manufacturing operations through its Indian subsidiary. Comtrend aims to strengthen its presence in India by partnering with local businesses and institutions, enhancing its service delivery, and contributing to the local tech ecosystem.
MCA Imposes Penalties on Zerodha and Wistron for Company Law Violations
The Ministry of Corporate Affairs (MCA) has penalised Zerodha Asset Management and Wistron Infocomm Manufacturing (India) for breaches related to the appointment of key executives, according to orders issued by the Registrar of Companies (RoC) for Karnataka. Zerodha Asset Management faces fines totaling nearly ₹24 lakh for failing to appoint a chief financial officer for 459 days until March 24, 2023. This penalty also extends to its director Nithin Kamath, CEO Vishal Jain, and four other individuals. Meanwhile, Wistron has been fined ₹11.89 lakh for delays in appointing a company secretary.
Both penalties, imposed on May 24, address violations of Section 203 of the Companies Act, which mandates timely appointments of key personnel. Zerodha has contested the RoC order and filed an appeal with the regional director in Hyderabad. Both companies admitted to the violations through ‘suo motu applications’ for settlement, with Zerodha’s breach dating from December 20, 2021, to March 23, 2023.
Editor’s Note: The Ministry of Corporate Affairs (MCA) has imposed penalties on Zerodha Asset Management and Wistron Infocomm Manufacturing (India) for violating company law provisions. Zerodha faces a fine of nearly ₹24 lakh for a 459-day delay in appointing a chief financial officer, while Wistron is fined ₹11.89 lakh for delaying the appointment of a company secretary. Both companies admitted to the violations and have contested or filed appeals, with Zerodha’s breach spanning from December 2021 to March 2023.