Information on the Target

VVDN Technologies Private Limited, established in 2007 by Bhupender Saharan, Puneet Agarwal, Vivek Bansal, and Murali Jayaraman, is a Gurugram-based company specialized in Product Engineering and Electronics Product Manufacturing. As an Original Design Manufacturer (ODM), VVDN offers comprehensive services transforming ideas into final electronic products. With a robust client base featuring leading global semiconductor companies and various Original Equipment Manufacturers (OEMs), the company operates across multiple sectors including 5G, Data Centers, Networking, Automotive, and IoT.

The company boasts a global presence with sales operations in the USA, Europe, Korea, Japan, and India. VVDN operates nine design and delivery centers employing over 2,000 engineers across four manufacturing facilities. It is recognized as one of India's fastest-growing ODMs, leveraging advanced technologies such as 5G, AI, ML, and Big Data. Remarkably, VVDN has seen its revenues rise approximately eightfold from FY2015 to FY2019.

Industry Overview in India

India's electronics manufacturing industry has seen substantial growth in recent years, attributed to several factors including increasing domestic demand, government initiatives aimed at boosting local manufacturing, and a rising digital ecosystem. The ‘Make in India’ initiative has further propelled investment in electronics, encouraging both international and domestic companies to establish manufacturing units in the country.

The telecommunications sector, driven by advancements in 5G technology, is a significant contributor to this growth, leading to heightened investments in R&D and product development. Additionally, the increasing penetration of IoT and smart devices is placing a strong emphasis on electronics product engineering, creating lucrative opportunities for ODMs like VVDN.

Moreover, with India positioned as a global hub for electronics manufacturing, local companies are rapidly expanding their capabilities to compete on the world stage. The push towards self-reliance in electronics manufacturing is opening new avenues for mid-sized players while addressing supply chain vulnerabilities exposed during global disruptions.

As a consequence, the demand for integrated product design and manufacturing services has soared, further solidifying the role of companies like VVDN in the overall ecosystem.

The Rationale Behind the Deal

The recent commitment of INR 2,500 million by the India Business Excellence Fund – III, managed by MOPE Investment Advisors, aims to bolster VVDN’s growth trajectory. This partnership will not only accelerate the company's expansion plans but also provide the necessary capital for enhancing manufacturing facilities and engineering capabilities.

By acquiring this investment, VVDN intends to leverage MOPE’s extensive experience in electronics manufacturing and organizational development. The funds will be utilized for various strategic initiatives including acquisitions, development of engineering labs, and creation of demo rooms to better serve its clients and enhance its capabilities, thereby generating value for stakeholders.

Information About the Investor

MOPE Investment Advisors Private Limited (MOPE), a subsidiary of Motilal Oswal Financial Services Limited, specializes in managing growth capital funds focused on mid-market companies across diverse sectors. Currently overseeing three funds—India Business Excellence Fund (IBEF), IBEF II, and IBEF III—MOPE primarily targets firms requiring growth capital in the range of INR 100 – 300 Crore.

With a proven track record of successful investments and exits across various industries, MOPE aims to identify and nurture high-potential companies. The firm emphasizes a hands-on approach to investment, providing strategic guidance alongside capital to create value for their portfolio companies.

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In our expert opinion, this deal represents a sound investment opportunity for MOPE. VVDN's impressive growth trajectory and its unique position within the rapidly evolving electronics space align well with the investment strategy of IBEF III. The potential for high returns is substantial, particularly given the ongoing demand for innovative technology solutions in India.

Moreover, the partnership leverages MOPE's extensive knowledge in electronics manufacturing, which can prove advantageous for VVDN as it scales its operations. The expected usage of funds for enhancing engineering capabilities and expanding manufacturing is likely to strengthen VVDN's market position further, making it a formidable player in both domestic and international markets.

Additionally, the increasing global focus on electronic self-sufficiency and localized supply chains adds to the relevance and timeliness of this investment. With VVDN’s strategic alignment in addressing these needs, there exists great optimism for its future growth and profitability.

Overall, the collaboration between MOPE and VVDN has the potential to not only yield significant financial returns but also play a crucial role in enhancing India's stature in the global electronics manufacturing landscape.

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