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Hero Electronix, a part of the $5-billion Hero Group, on Tuesday said it aspired to become a $1-billion company and will focus on businesses that do not exist in India right now, such as supplying printed circuit boards (PCB) to the defence and automotive sectors.
However, the company said it was not planning to start any manufacturing facility.
“We are not really looking at high-volume manufacturing of PCBs or fabs right now. We are focussed on our semiconductor customers. Those (manufacturing of PCBs) require high volumes, and we don’t have that size of market in India right now,” Ujjwal Munjal, Founder-Director, told BusinessLine .
Munjal said semi-conductor as a technology was evolving so fast that one needed to be in that ecosystem to be able to scale up quickly and be ready for the next evolution, whereas in India “our infrastructure development, regulatory environment, customs and other things are slow.” Having said that, he said India had a strong market for defence electronics, automotive electronics, and Internet of Things (IoTs), adding that there was still scope for companies, such as Hero Electronix, to set up manufacturing facilities.
“Our aim is not to go back to existing businesses,” said Nikhil Rajpal, Chief Executive Officer. “We will take small steps to build capability. Tests are going on and we can start manufacturing defence and automotive electronics in the next 24 months and IoT in the next nine months for home automation.”
Meanwhile, the company has acquired two businesses — Malaysia’s Spectrum Integrated Technologies and the test lab business of Singapore’s Lynxemi — for an undisclosed sum.
The acquisitions were made through Tessolve, a Hero Electronix venture and a leading provider of engineering services. Hero Electronix and its group companies have also planned an investment outlay of ₹1,000-1,200 crore by 2022, Munjal said.
The acquisitions are aimed at building businesses in the advanced technologies and electronics engineering space. Hero Electronix’s revenue at the end of fiscal 2017 stood at ₹600 crore. Tessolve was a key contributor growing at 40 per cent year-on-year (YoY) and the company is targeting similar growth this year too.
Hero Electronix and its partner companies have around 1,400 employees globally right now, Munjal added.
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