On the import side, while India still remains one of the largest defence importers globally, but the pattern is shifting. Earlier cycles were dominated by large-ticket platform imports such as fighter aircraft, submarines, and artillery systems. Today, imports are increasingly concentrated in critical technologies where domestic capability is still limited. These include aero-engines, high-end radar systems, advanced propulsion, niche electronic warfare systems, and certain semiconductor-intensive subsystems. Government is pushing toward indigenisation through positive indigenisation lists and procurement prioritisation, aimed at gradually reducing reliance on imported platforms. In effect, India is moving from being a pure buyer of finished platforms to a country that increasingly manufactures, integrates, and exports.

The reasons for this shift are structural:

1. Policy: The Defence Acquisition Procedure 2020, the Aatmanirbhar Bharat push, and higher capital outlays have directed procurement toward domestic industry. The Union Budget FY2026–27 allocated around ₹2.19 lakh crore toward defence capital outlay, a 20% increase YoY, creating sustained demand for indigenous systems.

2. Geopolitics: Border tensions with China and Pakistan have accelerated domestic production of surveillance systems, UAVs, artillery, and network-centric capabilities.

3. Industrial Ecosystem Development: Over 15,000 MSMEs now participate in defence supply chains, supporting DRDO & DPSUs with components ranging from avionics to electro-optical systems. Defence corridors in Uttar Pradesh and Tamil Nadu are aimed at building manufacturing clusters in the country.

What one should understand is that the real story is not just rising exports but changing composition and capability depth. India’s defence burden is rising alongside global spending trends, and modernization is becoming a larger share of budgets globally. For India, export growth is strong in percentage terms but still small relative to global defence trade. Amidst escalating trade and geopolitical disputes and a trend of national security prioritisation, global military expenditure is projected to register a 5% CAGR between 2024-2030, reaching $3.6 tn by 2030. These structural shifts are expected to provide strong tailwinds for defence contractors and their associated supply chains.

Adding to it, by CY2030, ‘modernization’ spend (read electronics) is expected to account for 30-45% of defence budgets in advanced economies (vs 15-25% in emerging economies). The biggest thrust will be towards electronics like unmanned and counter-UAS systems, with rising investments in loitering munitions, thermal imaging, radar discrimination, and directed energy systems. With defence manufacturing is also becoming digital-first, use of advance tech & electronics across biggest markets like U.S. and Europe is bound to rise.

For India, the next phase will depend on how much value addition India can achieve in high-technology domains such as advanced seekers, propulsion, sensors, and electronic warfare.

While the market size globally for defense electronics market is rising from $64.8 Bn in 2020 to $226.8 Bn by 2030, growth rate is fastest in India rising from $2.2 Bn to $17.83 Bn at CAGR of 23.3% in same time frame. (source)

So if the future of India’s defence story is about electronics, then the real question becomes execution. Who is actually building high-reliability, mission-critical electronics inside India?

To explore that, we recently visited our portfolio company Vinyas Innovative Technologies in Mysuru. In a conversation between Angad Kapur, Principal at Singularity, and Sumukh N., Director at Vinyas, what emerged was not just a factory tour but a window into how India’s defence electronics capability is maturing.

From EMS to Engineering-Led Manufacturing

Vinyas began as a traditional Electronics Manufacturing Services(EMS) player. Under the leadership transition from founder to second generation, the company has deliberately shifted its positioning.

Sumukh, who returned from the US in 2018, articulated the pivot clearly. The goal was not just to assemble boards, but to add engineering value to manufacturing. Over the last seven years, the focus has been on high-mix, high-reliability, high-complexity PCB assembly and system integration.

This distinction matters.

In defence and aerospace, value does not sit in volume. It sits in:

• Complexity

• Certification

• Reliability

Vinyas operates in low-volume, high-complexity environments where qualification cycles can stretch 10 to 12 months. Once qualified, however, customers tend to be extremely sticky. That structural stickiness is a defining feature of defence electronics supply chains.

Mission-Critical Subsystems, Not Commodity Boards

The company manufactures mission-critical electronic subsystems used across defence platforms, ranging from naval gun systems to other specialised applications. These include joysticks, power supplies and control modules that ultimately sit in the hands of end users.

Unlike commercial electronics, these products must undergo extensive qualification and testing before deployment. The certification and validation process is far more detailed than in consumer or industrial segments. Convincing a customer to even begin qualification represents a significant milestone.

Once approved, however, the relationship becomes long-term. In defence, switching suppliers is not a trivial exercise. This creates durability in revenue streams, albeit with longer gestation cycles.

Vinyas describes itself as a high-mix, high-complexity manufacturer. It does not chase large-volume consumer electronics. Instead, it focuses on segments where reliability standards are stringent and failure tolerance is near zero.

Certification as a Strategic Moat

In aerospace and defence electronics, certification is not a marketing badge. It is a barrier to entry.

Vinyas is certified under AS9100-D, the global quality standard for aviation, space and defence. More importantly, in May 2025, it secured NADCAP accreditation. Globally, only a small cohort of companies hold this certification in relevant categories.

The process took nearly four years, with the last two described as particularly gruelling. But the outcome places Vinyas in a narrow global niche.

For international OEMs evaluating Indian suppliers, such certifications alter perception. Historically, one of the biggest challenges for Indian electronics manufacturing was credibility. The belief that India could not deliver high-precision, high-reliability systems at global standards was deeply entrenched.

That perception is shifting.

Sumukh pointed out that when he moved back in 2018, the common refrain was that India could not manufacture at global quality levels. Over the past five years, aided by localization policies and the Aatmanirbhar push, global OEMs have begun to re-evaluate India as a serious manufacturing hub. Recognition of the Indian supply chain is no longer aspirational, it is becoming operational.

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Digitisation and Process Discipline

One of the less visible but more important aspects of modern defence manufacturing is digital process control.

Vinyas estimates that its facility is now 85-90% digitised. This includes traceability, process monitoring and workflow integration. In high-reliability environments, documentation and digital control are as important as hardware capability.

The company runs structured 90-minute production cycles, followed by a short pause that includes a 90-second meditation ritual. While this may seem cultural, it reflects an emphasis on rhythm, discipline and error minimisation. Even during the NADCAP audit cycle, this process discipline was reviewed. In a sector where audit trails and process validation define credibility, such systems become competitive advantages.

Digitisation also reduces cycle times and improves engagement with larger OEMs. For companies looking to integrate Indian suppliers into global programmes, process transparency is critical.

Vertical Expansion and Moving Up the Stack

While defence and aerospace remain core, Vinyas is now looking at vertical expansion into adjacent segments such as commercial aerospace, medical devices and industrial electronics.

The strategic intent is clear. Move up the value chain from PCB assembly toward subsystem and system-level integration. Higher integration typically translates to higher value capture and stronger customer entrenchment.

This mirrors the broader national trajectory you outlined earlier. India’s next phase in defence electronics will not be defined merely by assembling imported components. It will be defined by deeper subsystem ownership, integration capability and eventually indigenous design in critical areas.

Vinyas appears to be positioning itself for that transition.

Long-Term Orientation in a Structural Shift

Perhaps the most important theme from the conversation was mindset.

The transition from a founder-led enterprise to a more institutional structure is ongoing. The emphasis is on long-term stability over short-term visibility. In defence electronics, order cycles can be long and qualification timelines demanding. Patience becomes strategic.

India’s defence modernization cycle, global electronics intensity in military systems and policy-led localization are creating structural tailwinds. But execution will determine who captures value.

The story of Vinyas is not about scale in the conventional sense. It is about credibility, certification, process depth and moving steadily up the integration curve.

If India’s defence exports have moved from components to systems, the next leap will depend on companies that can combine manufacturing precision with engineering depth. That is where the real value addition will lie.

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This is where Strategic Autonomy comes into the picture, with one motto: we will trade with the world, but we won’t let the world control our survival. It sits between two extremes:

• Total Globalisation which brings efficiency but also high vulnerability when geopolitics or supply chains break down, and

• Isolation, which reduces dependence but hurts competitiveness & growth.

For India, the answer lies in taking this balanced path, staying integrated with the world while building enough domestic strength and diversification to minimise strategic risk. At Singularity AMC, this is not just a macro observation for us. It is the core organising principle of how we invest.

We believe when a country with India’s scale moves from 80-90% import dependence to even 40-50% localisation in critical sectors, the shift is not just incremental, it creates entirely new profit pools, new industrial champions, and new export capabilities.

Our aim is to identify sectors where three forces converge:

1. Clear national intent: Whether it is PLI incentives in electronics, ECMS support for PCBs, ISM backing semiconductors, or the 75% domestic reservation in defence capex, the direction of capital formation is unmistakable.

2. Structural import gaps: In electronics, we consume roughly $150 Bn but add only ~20% value domestically. In semiconductors, we consume ~$50 Bn and produce less than 10%. In defence, indigenisation lists now cover over 4,000 components that must be sourced locally. These are not small substitution opportunities but multi-billion-dollar revenue pools waiting to be built.

3. Execution capability: Strategic autonomy only works when policy meets entrepreneurial execution. We look for companies that are moving upstream, absorbing technology through partnerships, improving unit economics through incentives, and building export competitiveness. Businesses that shift from assembly to components, from platforms to electronics, from low-margin manufacturing to IP-led systems.

2nd Order Effect: Road to Become Product Nation

Countries that lack strategic autonomy become vulnerable during geopolitical tensions, supply chain disruptions, or sanctions, limiting their ability to act purely in their own interest. Whereas, countries that build around it gain control over essential value chains, strengthen their negotiating power, and attract long-term capital. Over time, this shift does more than reduce risk, it transforms them into EXPORT POWERHOUSE.

Let’s take the example of India’s defence exports, which were just around ₹700 Cr in FY2014. Government policies then evolved, and DAP 2020 (Defence Acquisition Procedure) was introduced, giving clear preference to the procurement of high-quality equipment manufactured in India. The bar was set high, and today 75% of our defence spending happens on ‘Made in India’ products.

The bigger benefit comes in the form of a second-order effect, wherein increased participation by private firms and a prospering ecosystem helped India export a record ₹23,622 Cr in FY 2025. We are now looking at ₹50,000 Cr of exports by 2029.

So the need of Aatmanirbharta has actually shown us the path of prosperity, huge employment opportunities by becoming a PRODUCT NATION. Similar is the case of electronics where while the domestic manufacturing grew 6X in the last 11 years, the exports actually grew 8X and continue to grow much faster with increasing value addition. This unlock continues to take place across the sectors we are focused on.

Road to Viksit Bharat 2047

India’s ambition to become a developed economy by 2047 is anchored in a massive industrial and energy expansion over the next decade. The country is targeting 500 GW of renewable energy capacity by 2030, alongside $100 Bn+ of investments in grid and transmission infrastructure. EV penetration is expected to reach 35-40% by 2030, supported by 150 GWh of battery storage capacity. On the manufacturing side, electronics production is projected to scale from $115 Bn today to $450 Bn by 2030, while semiconductor demand could rise from $39 Bn currently to $148 Bn by 2035. Defence production stands at roughly ₹1.5 lakh crore annually, with exports already touching ₹23,622 crore in FY25 and a target of ₹50,000 crore by FY29. These are not isolated sectoral ambitions. They represent the foundation of a new industrial architecture.

Viksit Bharat 2047, therefore, is a capital cycle story. Energy security, electronics depth, semiconductor capability and defence indigenisation together create compounding industrial capacity. India’s path over the next 20 years will likely be defined by how effectively it converts today’s import gaps into tomorrow’s global competitiveness.

As these structural changes continue to play out across our sectors of interest, we at Singularity AMC are here to accelerate that shift.

We recently discussed this framework in greater depth in a podcast conversation between Yash Kela and Sonia Shenoy, where the idea of Strategic Autonomy was unpacked from both a national and investment lens. The discussion centred on a simple but powerful shift: moving from assembly-led participation in global supply chains to owning deeper layers of capability, whether in electronics, defence systems, energy infrastructure or advanced manufacturing.

A key takeaway from that conversation was that strategic autonomy is not about isolation, but actually building enough domestic strength to negotiate with the world from a position of confidence. For investors, that translates into identifying businesses that are genuinely moving up the value chain, strengthening technology depth, and creating optionality beyond policy incentives. If you would like to explore the thinking behind this theme in more detail, you can watch the full conversation below.

Watch the full podcast:

$1B Investor’s Guide to India’s Next Boom: Defence, EVs & Solar

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In India, we have seen global luxury brands doubling down on Indian stars as gateways to a fast-growing $20-$30 Bn luxury market, while a new ‘playbook’ focused on authenticity and individual-centric consumption is emerging for both stars and brands. Alia Bhatt for Gucci, Sonam Kapoor for Dior and Lancôme, Deepika Padukone for Louis Vuitton and Cartier, and Kiara Advani for Maybelline New York.

But this shift is no longer limited to endorsements. A parallel evolution is underway where celebrities are moving from being brand ambassadors to becoming brand builders. Film stars, athletes, and digital creators are launching their own beauty, wellness, fashion, and D2C labels, leveraging their social media equity to create direct consumer pull. In a digital-first India, where Instagram reels and influencer recommendations shape purchase decisions, celebrity-led brands come with built-in distribution, trust, and storytelling power.

What began as face-value endorsement is increasingly turning into equity ownership, co-creation, and long-term brand play.

In 2019, we saw Kay Beauty being launched by Katrina Kaif in partnership with Nykaa, which later held a 51% stake and provided full-stack capabilities from manufacturing to distribution.

Post 2019, this model quickly spread across sectors as celebrities moved from endorsements to ownership. In beauty and skincare, Deepika Padukone’s 82°E marked a strong entry into premium self-care, while Anushka Sharma’s Nush tapped into fashion and lifestyle. Alia Bhatt started sustainable clothing brand for children, Ed-a-Mamma. In wellness and performance nutrition, Ranveer Singh’s SuperYou entered the market with protein wafers and functional snacks, signalling the growing celebrity push into health-focused consumer categories. Virat Kohli’s One8 continued to expand across athleisure and lifestyle, blending sports credibility with mass appeal.

From an investor’s lens, the ‘merchant–entertainer’ model offers asymmetric upside but also carries a high mortality rate. The transition from a personality-driven launch to a durable, cash-generating franchise is fraught with operational and reputational risks. The creator economy has lowered barriers to entry, making distribution, marketing, and community-building far easier than before. But it has simultaneously raised the bar for longevity. Fame can drive discovery and accelerate early revenue, yet it cannot manufacture repeat purchases, pricing power, or supply chain resilience. Without product-market fit, strong execution, and credible governance, celebrity equity risks becoming a short-lived spike rather than a compounding consumer business. Some key pointers here:

1. The Quality Imperative: When a product fails to perform, the celebrity's fame accelerates the backlash rather than shielding the brand. A notable example is influencer Jaclyn Hill’s cosmetics brand, which suffered a catastrophic launch due to contaminated and defective lipstick products.

2. The Authenticity Deficit: In the Indian market, brands that lack a distinct creative direction or fail to differentiate from fast-fashion incumbents struggle to gain traction. Anushka Sharma’s brand, Nush, faced criticism for generic designs that did not offer a unique value proposition beyond the celebrity association, leading to difficulties in distinguishing itself from established players.

3. Pricing Mismatches: A critical error in price-sensitive markets like India is misaligning ‘prestige’ pricing with mass-market expectations. Deepika Padukone’s 82°E did face some consumer backlash for its premium pricing strategy.

Therefore, for investors, celebrity-led brands require disciplined underwriting. Premium pricing without real product differentiation is a warning sign. Standalone D2C setups lacking supply chain or distribution depth add execution risk, as does over dependence on paid marketing instead of the founder’s organic reach. Most importantly, trend-driven or white-label products rarely build durable moats. In this category, repeat purchase behaviour and operational strength matter far more than follower counts.

At Singularity’s Investor Operator Playbook, we hosted Tarun Sharma, Co-founder of mCaffeine and now the force behind Hypen, which partnered with Kriti Sanon (Co-founder & Chief Customer Officer), to decode one of the more candid turnaround journeys in India’s consumer landscape. What unfolded was not a story of incremental optimisation. It was a story of survival, consolidation, and ruthless clarity.

When Cash Becomes the Only Metric

Mid 2024 was not comfortable.

Tarun describes it as the “sixth near death” in a 15-year entrepreneurial journey. The hardest one. The metric that mattered was not GMV, not market share, not social impressions. It was cash in the bank. The turning point was personal. On the day Tarun and his wife and co-founder Vaishali learned they were expecting their child, the fourth minute after the news was not joy. It was math. How many months of runway were left?

That moment re-framed everything.

The immediate operating principle became simple: at any point, the company must have six months of survival capital visible. Every decision flowed from that constraint. Constraints did not shrink ambition, they sharpened it.

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The Core Mistake: Trying to Be Everything

In the years of rapid D2C scaling, mCaffeine had expanded aggressively. Face care. Hair care. Cosmetics. Multiple consumer personas. Multiple geographies. Heavy marketplace exposure.

What got diluted was clarity.

Tarun and Vaishali went back to first principles. Brands, like people, are not good at everything. When a young brand tries to act like a mature conglomerate, it stretches itself beyond its natural strengths. So they made a hard choice and cut nearly 70% of categories. They consolidated offices across Goa, Mumbai and Bangalore into a single operating base. They eliminated consumer cohorts that did not respond strongly. They said no to channels that did not create durable value. Consolidation became the theme.

The only thing they did not cut was human capital. In fact, they appraised above market during the toughest period. Protecting culture and core team was non-negotiable.

Listening to 1,500 Consumers

When founders are unsure where to cut, spreadsheets rarely give the full answer. Tarun and Vaishali went back to the only source of truth that mattered: the consumer. During the toughest stretch, they personally spoke to nearly 1,500 to 1,600 customers, many of them loyal, repeat buyers. The insight was uncomfortable. mCaffeine was not seen as a multi-category beauty brand. It was firmly perceived as a body care brand, more specifically a body scrub brand. Ironically, at that time, close to 60% of revenue was coming from face care.

The second discovery was even more sobering. Despite spending heavily to build awareness across newer categories, loyal customers had little or no recall of those launches. Marketing had expanded width, but it had not expanded meaning. The brand occupied a strong mental space, but only in one part of the consumer’s routine. In the shower, mCaffeine stood for wash-off body care. That association was powerful. Everything else was peripheral.

That clarity led to decisive action. Instead of chasing category expansion, they leaned into what consumers already believed. The portfolio was rebuilt around body care as the anchor. The question shifted from how many categories they could enter to how far they could scale the one they genuinely owned. The new ambition was simple: take body care from 150 crore to 500 crore and beyond by doing fewer things better.

Rebuilding Unit Economics Through the 6Ps

Once the strategic consolidation was clear, execution turned precise. Tarun describes mCaffeine’s operating lens through six levers:

• Proposition

• Product

• Packaging

• Pricing

• Promotion

• Platform

Each lever was revisited. The proposition was sharpened around body care that was both efficacious and emotionally resonant. Packaging evolved beyond the early all-black aesthetic, which had begun to lose differentiation on shelves. Pricing was recalibrated to restore contribution margins rather than chase top-line growth.

Promotion strategy shifted meaningfully. Instead of broad, indiscriminate spending, marketing was directed toward high-repeat cohorts and measurable retention. The platform mix was also rebalanced. Today, roughly 55-60% of the business comes from D2C, and importantly, that channel operates profitably. Direct access to consumers, data visibility and faster feedback loops became structural advantages rather than marketing talking points.

At the financial level, the team went deeper into the P&L than ever before. What used to be a 20-30 line summary was broken down into more than 100 granular cost heads. Every rupee was scrutinised. Assumptions were tested. Optimism was replaced by precision. That level of granularity, rather than a single bold move, is what ultimately rebuilt unit economics.

The Role of Strategic Capital

August 2023 marked a defining inflection point.

At Singularity’s office, Tarun and Vaishali sat down with Yash Kela and Avnish Anand for an intensive working session that lasted an entire day. The goal was simple but uncomfortable: deconstruct the business without bias. The notes from that meeting continue to serve as an operating blueprint.

The discussion distilled down to one central driver. Increase repeat. Improve cohort profitability. Everything else was secondary. Instead of chasing scale narratives, the team focused on strengthening the economics of existing customer behaviour.

In this context, strategic capital meant far more than equity. It meant operating depth. Founders often struggle to find honest, high-quality feedback. It is rare to find someone with skin in the game who can challenge assumptions without destabilising the team. The collaboration was not about top-down instructions. It was about structured thinking. Going deep into data. Breaking broad narratives into micro decisions that could be executed.

The outcome was decisiveness. Not brutality, but clarity.

From mCaffeine to Hyphen: Operator-Led, Celebrity-Anchored

The conversation then shifted to Hyphen, co-founded with Kriti Sanon.

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Hyphen’s structure is intentional. It is operator-led and celebrity-anchored, not celebrity-led. That distinction shapes everything. Kriti is positioned internally as Chief Customer Officer rather than brand ambassador. The idea is simple. If the creator is not genuinely invested in solving a real consumer problem, even a following of 50 Mn will not sustain long-term brand equity.

Authenticity became the foundation. Kriti’s personal interest in skincare and beauty was not treated as a marketing asset but as operating input. She engages with product development, consumer insight and positioning. The brand narrative is built around solving accessible, everyday skincare needs rather than relying on aspirational distance.

Pricing was equally deliberate. Instead of launching as a high-end vanity label, Hyphen positioned itself as aspirational yet accessible. The goal was scale with trust. To serve crores of consumers rather than a narrow luxury segment. This decision aligned distribution strategy, margin expectations and communication tone from the outset.

Importantly, Hyphen did not start from scratch. It leveraged the institutional muscle of mCaffeine. Years of operating experience, data discipline and category learning helped avoid predictable mistakes. Where authenticity anchored the proposition, data disciplined execution.

The Bigger Lesson

Fame can open the door. Only clarity and operating depth can keep it open. Sometimes the path forward begins with a simple commitment: build from what consumers genuinely trust you for, scale that trust with discipline, and let credibility compound over time.

In a market where brand awareness can be built overnight, especially with celebrity reach and social media amplification, loyalty is far harder to earn. A large following can spark discovery but you also need to manufacture trust in minds of your customer.

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At the same time, impulsive buying has accelerated, fuelled by a growing culture of instant gratification. The gap between thinking about a purchase and actually buying it has become much shorter. Decisions that used to take days now happen within minutes, as everything is moving towards becoming seamless.

And the shift is visible in everyday life. People do not plan their travel or stays far in advance now; they simply check availability on an app, compare a few listings, and book on the spot. The entire journey from discovery to decision now fits inside a single screen.

As these behaviours become the norm, financial needs will evolve alongside them. Institutions must continually adapt to a world where users expect speed, simplicity, and convenience at every interaction. Across financial services, one-tap card payments, instant UPI transfers, and quick-access credit have stripped away nearly all friction. Digital nudges and targeted offers further accelerate decision-making, often pushing spending to happen before deliberate thought sets in.

India now produces nearly 20% of the world’s data and processes over 50% of global digital transactions. With such a massive volume of real-time data being generated, adding an AI layer over existing systems is no longer optional; it is inevitable. AI becomes the intelligence layer that helps institutions make sense of behaviour at scale, anticipate needs, and intervene at the right moment. The advantage will belong to those who can process signals faster than human judgement ever could.

Today’s blog is a bit long, recommended to read it on our website here.

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Why India is Uniquely Positioned?

With a high level of digital advancement, often ahead of many developed markets in key areas, India can see much wider and newer use cases of AI emerge in financial services (FS). India’s Digital Public Infrastructure (DPI) platforms such as Aadhaar, UPI, and DigiLocker serve as a robust foundation to build low-cost AI solutions at scale, making the country a playground for innovation to prosper.

While India’s capabilities in building core AI infrastructure such as chips and data centers are still limited, it is at the application layer where the country has truly taken off and is seeing wide adoption. There are over 900 GenAI startups in India as of June 2025, compared to around 250 in June 2024 and just about 50 in June 2023. Government support has also helped, along with a clear willingness to accelerate adoption to improve system-level efficiencies. For instance, Indian Railways has started using AI-powered tools to optimise train occupancy, resulting in a 30% increase in rate of confirmed tickets.

Now within financial services, AI adoption is now cutting across 4 major segments at once: Banking, Lending, Insurance, and Payments. Across horizontal use cases, whether it is a bank on boarding a new customer, a lender assessing risk, an insurer detecting fraud, a wealth platform personalising advice, or a payments company improving dispute resolution, AI is enhancing speed, accuracy, and operational efficiency across the board.

These horizontal use cases span the entire value chain and are now very common:

• AI is streamlining on boarding through automated KYC verification, document extraction, and identity checks.

• Strengthening underwriting and risk assessment through alternative data, behavioural patterns, and predictive models.

• Fraud detection has become real-time, with AI spotting anomalies and suspicious transactions before they escalate.

• Customer support is also being transformed through multilingual AI assistants that reduce wait times and resolve queries instantly.

With India’s digital rails feeding real-time data into the ecosystem, financial institutions can build dynamic credit lines, personalised product recommendations, proactive risk monitoring, and automated servicing workflows. The biggest gains will come from embedding AI into everyday processes rather than treating it as a separate tool. Over time, AI could become the baseline expectation across the entire financial services industry.

We will now discuss key vertical use cases across these 4 segments (Banking, Lending, Insurance, & Payments) one by one. Wealth Management is another segment, but shall discuss it in detail in some other blog.

Banking: From Chatbots to AI Relationship Managers

The first wave of virtual assistance was built on simple rule-based chatbots and Interactive Voice Response (IVR) systems. Early versions, including HDFC Bank’s initial “Eva”, launched around 2017, operated on decision trees and pre-scripted replies. These tools were useful for managing large volumes of repetitive queries such as balance checks or basic transaction history, but they struggled beyond that. They could not understand context, interpret intent, or manage multi-turn conversations.

Over time, these chatbots have evolved with the help of GenAI, with leading private sector banks in India being early movers in adopting AI to scale their relationship management capabilities. They have transitioned from simple query-resolution chatbots to sophisticated Virtual Relationship Management (VRM) ecosystems that blend human expertise with AI-driven insights. Here are some details of key capabilities private banks now have in their chat bots with AI:

Public sector banks are also leveraging AI to manage massive customer volumes, enhance operational efficiency, and drive financial inclusion across diverse demographics. Bank of Baroda (BoB) has an AI-powered VRM named “Aditi”, designed as a computerized 3D digital avatar that interacts with customers via audio, video, and chat. It offers conversational banking rather than static, menu-based responses, along with 24/7 multilingual support.

“More than 55% of support requests were resolved digitally with over 30% of these journeys being straight-through resulting in reduced turnaround times, lower call volumes and improved customer satisfaction.” - HDFC Bank Annual Report FY2025

With Voice AI, the virtual ARM becomes an always-available, multilingual relationship manager that understands natural speech, resolves routine queries instantly, and guides customers through tasks with ease. It automates high-volume requests like balance checks, statements, EMI reminders, and card blocking, allowing human RMs to focus on higher-value interactions. It also acts proactively by tracking customer behaviour and sending timely voice nudges for payments, low balances, or salary credits. Even during human-assisted calls, Voice AI supports the RM by pulling data, suggesting responses, and summarising conversations. By enabling smoother on boarding, smarter cross-sell, and round-the-clock support, Voice AI reduces cost to serve and significantly improves customer experience.

“Few senior banking industry veterans claim that with AI, banks can reduce operational expenditure by 5-8% over the next 12 months (2026). This does not include Agentic AI, such as AI or voice bots answering or replying to customer queries, but rather focuses on digitising operations and creating automated workflows within banking apps. Another area where AI is helping is in hand-holding customers and creating customised journeys based on an individual’s digital footprint. Banks have been testing this and are seeing improvements in reducing drop-offs.”

Lending: Shift to Real-Time, Intelligence-Led Underwriting

As consumer behaviour has shifted and digital adoption has accelerated, decision timelines have compressed dramatically. Lenders today can reach and service customers with far less friction than before, expanding the addressable credit opportunity. The central challenge, however, lies in making real-time decisions on whom to lend to and how much to lend. As credit moves faster and becomes more digital, balancing speed with risk control has become increasingly difficult, particularly in markets like India, where a large share of borrowers are new to credit or remain thin-file.

While underwriting, lenders have to balance two competing objectives:

1. To approve genuine customers quickly, with minimal friction

2. To protect the lender by filtering out fraudulent or high-risk profiles

This is where a data intelligence layer like Data Sutram becomes critical. By increasing identity certainty and enriching the lender’s view of customer risk and financial capacity, it helps underwriting systems make sharper decisions earlier in the funnel.

They are building India’s largest identity bureau for profile-based underwriting, enabling lenders, fintechs, and financial platforms to make faster, safer, and more confident decisions. By collecting and structuring data from over 250 sources, they bring in alternative data such as satellite imagery, mobile pings, and past POS transactions in real time to strengthen underwriting.

At its core, this is advanced data aggregation and analytics, pulling insights from non-traditional sources. The question then becomes: what additional value can AI bring?

AI can act as a second layer of intelligence. Beyond structuring data, an AI agent can observe a potential customer’s behaviour both on and off the platform, including how they interact during the application journey and what signals emerge from those interactions. This creates an engagement layer that generates behavioural insights in real time, complementing static data sources and strengthening the underwriting proposition. Such agents can evaluate digital footprints and mobile usage patterns to assess ‘intent to pay’ and lifestyle stability, moving underwriting from pure data collection to dynamic behavioural assessment.

Key takeaways from CRO of an NBFC (Data Sutram client):

1. AI has enabled a fully straight-through underwriting process for small-ticket personal loans up to ₹2.5 lakh. There is no “refer to credit” layer; it is either an approval or a rejection, with virtually no incremental underwriting opex.

2. AI has also made on boarding sharper. Video KYC integrated with face recognition APIs has improved identity verification accuracy and reduced manual intervention.

3. Origination & borrower identification have become more data-driven. Using machine learning models, they identify borrower “look-alike” cohorts, overlay profiles, and attempt to predict repayment behaviour at the time of disbursal.

4. Collections remains a significant opportunity. Beyond automated calling and bot workflows, AI can potentially predict portfolio stress early and flag loans that may turn delinquent, enabling proactive intervention.

This helps enable not just more efficient underwriting, but also improves all key activities from origination to monitoring and collections.

Insurance: AI Across the Value Chain

Picture this:

While applying for motor insurance, customers can now create a short video of their vehicle, which is analysed using advanced deep learning models that assess around 60 attributes, including cracks, dents, and other damages. This is reality now!

AI now runs across the entire insurance value chain, touching customers, partners, and employees in different but connected ways:

• For customers, AI handles real-time assistance across purchase and post-sales journeys - from call-based interpretation tools and 24×7 chat interfaces to behavioural nudges, self-help dashboards, automated document uploads, and sentiment-aware escalation.

• For insurance partners, AI strengthens core risk and operations through fraud detection, NLP-based disclosure checks, and remote photo/video inspections that speed up break-in cases and motor claims.

• For their employees, AI surfaces deeper customer insights, provides in-call nudges, scores call quality, and automatically assigns personalised training modules. Together, these systems reduce friction, elevate accuracy, and compress turnaround times across the ecosystem, making every interaction faster, more consistent, and far more intelligent.

One area where AI can really help is in increasing the penetration levels of insurance in India by making it possible to introduce new products in the insurance industry. Agentic AI networks can engage millions of customers simultaneously through digital channels, replacing high-commission human models and making small ticket policies, say ₹1 to ₹500, profitable! It helps bring down the overall cost of assessing risk, underwriting, and processing claims. Many new forms of products can emerge, and one key example is the bundling of small-ticket insurance.

For example, for someone travelling from City A to City C, with the first half of the journey by train until City B and then by flight to City C, an insurance provider is today enabled, with the help of AI, to assess the probability of an adverse event in almost real time. They can underwrite the risk of the train getting delayed and the traveller missing the flight, thereby offering a bundled insurance option at the point of travel booking.

This is just one example. Millions of scenarios and insurance offerings, based on their possible outcomes with real-time risk assessment could shape the future of insurance as power of compute continues to accelerate.

Payments: AI makes Prevention Real Time

India has emerged as the undisputed global leader in digital payments. Today, the country processes more than half of the world’s real-time digital transactions, powered largely by the scale and ubiquity of UPI. In Dec’25 alone, 21.63 Bn real time transactions were processed.

What began as a public digital infrastructure experiment has evolved into a mass adoption story, embedding digital payments into everyday life across income levels, geographies, and use cases. As volumes scale and transaction speed compresses, fraud prevention can no longer rely on post-facto controls. Modern banking systems need to identify risk as it emerges, not after losses have already occurred. This is where AI-driven fraud detection fundamentally changes the game.

Even areas such as how a user interacts with the interface of their usual payment app, with subtle behavioural cues like typing rhythm, swipe patterns, or navigation flow, can help validate identity even when credentials are compromised. At scale, AI automates fraud monitoring and case prioritisation, allowing teams to focus only on the highest-risk alerts. It can assess fraud risk before a transaction is completed by combining device, network, behavioural, and historical signals into a real-time risk score. This enables banks to block or delay genuinely risky transactions without adding friction for legitimate customers.

Payment security is a system-level challenge at the global level, which is why giants like MasterCard and Visa are actively investing in and acquiring companies to enhance their fraud protection capabilities for consumers worldwide. For example, Visa acquired Featurespace for a purchase consideration of $946 Mn in Dec’24 to help prevent and mitigate payments fraud and financial crime risks through the use of real-time AI.

They now have a real-time risk-scoring engine named Visa Advanced Authorization (VAA), that evaluates up to 500 unique attributes per transaction in roughly one millisecond, looking for unknown correlations in data to identify high-risk activity.

What more?

Apart from above key 4 areas that we discussed in this blog, AI assists in many more areas, one of them being wealth management sector through the creation of synthetic audiences and look-alike models by training on demographic & psychographic data, to simulate customer segments, identify high-potential prospects, and personalize outreach. Instead of relying only on historical client lists, wealth platforms can now model future demand. AI can forecast which investor cohorts are likely to shift from savings to market-linked products, who may upgrade to advisory mandates, or which clients show early signals of churn. Portfolio construction is also becoming more dynamic, with AI continuously re-balancing allocations based on risk tolerance, behaviour, and market movements.

Across banking, lending, insurance, payments, and wealth, AI is becoming the intelligence fabric that connects data, decisions, and customer interaction in real time. India’s digital rails, behavioural data scale, and application-layer innovation provide a unique backdrop for this shift. The institutions that embed AI deeply into workflows, rather than treating it as an experiment, will define the next decade of financial services.

That’s all for today!

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The conversation moved beyond surface-level trends to examine how value will be created, captured, and sustained as India’s consumption engine matures.

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Brand Awareness Is High, Loyalty Is Fragile

Indian consumers today are more informed than at any point in history. Digital reach, influencer ecosystems, and algorithmic discovery have dramatically lowered the cost of awareness creation. However, this has come with a sharp decline in brand loyalty.

Data across categories shows that repeat purchase cycles are shortening and experimentation is rising, especially among urban and younger cohorts. Consumers are willing to switch brands for marginal improvements in design, functionality, price, or perceived values. This is visible across apparel, personal care, appliances, and packaged food.

For new brands, this creates opportunity. Distribution is no longer controlled by a handful of legacy players. Marketplaces, quick commerce platforms, and direct-to-consumer channels have broken historical gatekeeping. A challenger no longer needs national general trade presence to reach a meaningful share of its target audience.

At the same time, this abundance of choice has made scale harder to achieve. Building a niche brand is easier. Building a category-defining, long-lasting business is significantly harder.

Indian Consumers Upgrade & Rarely Look Back

One of the most important behavioural insights discussed was that Indian consumers rarely downgrade once aspiration shifts upward. While consumption may pause during inflationary periods, long-term trading down is uncommon.

Over the past decade, this pattern has played out clearly. Categories such as packaged foods, personal care, home appliances, and apparel have steadily moved towards premium and mid-premium segments. Even in mass categories, growth is increasingly coming from higher price points rather than volume alone.

Crucially, this phenomenon is no longer limited to metros. Tier two and tier three cities now account for a disproportionate share of incremental consumption growth across beauty, fashion, and home categories. Improved logistics, rising disposable incomes, and digital access have collapsed the traditional urban-rural aspiration gap.

The challenge for brands is not demand creation, but supply chain and product architecture. Aspirations often run ahead of incomes. Companies that can deliver quality, design, and reliability at accessible price points without breaking unit economics are best positioned to win.

Health Has Become a Signal of Status

A defining shift across demographics is the rise of health as a form of social signalling. Fitness, nutrition, sleep, and performance optimisation are no longer private choices. They are visible markers of discipline, awareness, and aspiration.

Data reflects this clearly. India’s fitness and wellness market is growing at a double-digit rate, with wearables, athleisure, functional nutrition, and sports-led categories expanding far faster than traditional discretionary segments. Younger consumers are entering gyms earlier, spending more on performance gear, and adopting habits once associated with older or wealthier cohorts.

Importantly, the focus has moved from prevention to performance. Consumers are not just trying to avoid illness. They want to optimise energy, strength, recovery, and longevity. This shift is creating white spaces across supplements, devices, apparel, and digital services.

Why Product and Supply Chain Trump Marketing

Despite the explosion of brand storytelling, the panel repeatedly returned to fundamentals. Sustainable consumer businesses are built on product differentiation, supply chain control, and execution depth.

Categories that appear crowded on the surface often have weak underlying innovation. Many brands rely on marketing arbitrage rather than structural advantage. As customer acquisition costs rise and loyalty weakens, these models struggle to scale profitably.

Atomberg’s journey illustrates a different path. By anchoring differentiation in engineering, energy efficiency, and in-house manufacturing capabilities, the company created pricing power and margin headroom. Backward integration, scale-driven efficiencies, and continuous R&D investment allowed it to expand categories while protecting economics.

Similar patterns can be observed in food, appliances, and home improvement. Brands that invest early in supply chain capabilities, product reliability, and quality control tend to compound advantages over time, even if their early growth appears slower.

India’s Consumer Market Is Still Under-Competitive

A provocative but data-supported argument was that India’s consumer market remains structurally under-competitive. Legacy FMCG companies have generated extraordinary returns on capital for decades, driven largely by distribution dominance rather than defensible intellectual property.

What is changing is not competition within legacy categories, but fragmentation of wallet share. Disruptors are not attacking incumbents directly in soaps or staples. Instead, they are capturing consumption in adjacent formats, new use cases, and emerging sub-categories.

For example, cleansing has expanded from soaps to face washes, serums, and specialised personal care formats. Food consumption has shifted from staples to ready-to-eat, functional, and premium offerings. Appliances are increasingly evaluated on efficiency, design, and technology rather than price alone.

As a result, incumbents may appear stable in market share terms, but are steadily losing relevance in high-growth consumption pools.

Offline Still Holds the Profit Pool

A consistent conclusion from the discussion was that building a large, profitable consumer business in India without offline presence remains extremely difficult.

In most categories, 70 to 90% of volume still flows through offline channels. Profit pools tend to be even more concentrated there due to lower commissions, higher average selling prices, and better control over merchandising.

Offline retail also builds trust, which is critical in evaluated purchases such as appliances, apparel, and personal care. It improves retention, lowers lifetime acquisition costs, and enables brands to influence the point of decision through retailers, installers, and local advocates.

Digital channels are powerful entry points for discovery and experimentation. But offline execution remains essential for durable scale and profitability.

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AI Is Improving Efficiency, Not Rewriting Business Models Yet

Artificial intelligence is beginning to deliver tangible benefits, but largely through operational efficiency rather than headline growth.

Marketing creative costs are falling as content production becomes faster and more iterative. Data analysis, reporting, and decision-making cycles are compressing. Customer service automation is reducing response times and cost-to-serve.

One of the most promising frontiers is offline intelligence. AI-enabled video, audio, and sensor data can finally bring visibility into footfall, dwell time, conversion, and in-store behaviour. Historically, offline retail lacked granular data. This gap is now closing, with meaningful implications for store productivity and experience design.

However, panelists agreed that it is still early. AI is a layer of advantage, not a substitute for strong products or execution.

Where the Next Decade’s Opportunities Lie

Looking ahead, several categories stand out where structural tailwinds exist but scaled leaders remain limited. These include health and wellness, sports and fitness, toys, climate-resilient agriculture, longevity-focused products, elderly care, and women’s health.

These segments benefit from demographic shifts, rising incomes, and cultural change. Yet success will depend less on speed and more on discipline. The winners will be those who combine product depth, supply chain control, thoughtful distribution, and patient capital allocation.

Closing Thoughts

The Indian consumer story in 2026 is no longer about access or discovery. It is about endurance. The next generation of category leaders will not be defined by how fast they grow in their early years, but by how well they balance aspiration with affordability, innovation with execution, and growth with profitability.

The opportunity remains enormous. But the standards for building enduring consumer businesses in India have decisively risen. Watch the complete podcast below.

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In the last decade, India’s electronics industry has grown from around $45 Bn to more than $115 Bn today. Domestic value addition has improved but is still only around 21%, which shows how large the growth opportunity is. Over the next decade, categories such as smartphones, consumer electronics, automotive electronics, defence electronics, medical devices and components could push the industry towards $450 Bn.

Policy support, supply-chain shifts, strong engineering talent and rising domestic demand have combined to change the trajectory. More importantly, India now recognises that relying on foreign technology is a risk to economic & strategic autonomy.

To understand this transition better, Manish Sharma (Former Chairman Panasonic India) and Sanjay Nayak (Co-founder Tejas Networks, Ex-CEO & MD) joined Yash Kela and Nishchal Mittal from Singularity for a detailed conversation. The insights from their journeys, including near-death moments and long-term learning, offer a real blueprint for what India must solve next.

The Hard Lessons That Built Resilience

Both leaders shared early failures that shaped their thinking.

Manish Sharma’s Lesson: Design Must Match Real-World Conditions

Early in his career at Samsung, Manish Ji spent a year convincing the Russian subsidiary to place export orders from India. After significant effort, Samsung shipped 5,000 televisions, then another 5,000. When the units arrived in Russia, every single TV had hairline cracks.

Initially, the team blamed production. Later, the real problem became clear. The plastic housing used in India could not withstand the sub-zero temperatures during ocean transport. This was not a manufacturing issue but a design oversight.

The lesson was simple yet powerful. Engineering cannot happen in isolation. Design must reflect the customer’s environment and the entire life cycle of the product. Lab success does not guarantee field success.

Sanjay Nayak’s Journey: Surviving Financial Collapse & Natural Disasters

Tejas Networks began in 2000 with an ambitious idea. India had almost no deep-tech hardware ecosystem. Venture capital was limited. Telecom equipment required near-perfect reliability. Global giants dominated the space.

Even then, Sanjay Ji and his co-founders believed India could build world-class telecom products. Tejas grew rapidly for the first seven years, reaching almost ₹700 Cr in revenue and preparing for an IPO. Then the global financial crisis hit. Nortel, which contributed around half of Tejas’s global business, filed for bankruptcy. India’s 2G scam froze domestic capex. Revenue dropped sharply.

The trouble did not end there. A severe cyclone flooded the Pondicherry factory under more than fifteen feet of water. Months later, a fire damaged the Bangalore office building. At one point, Tejas had more cash in the bank than its total market cap around Covid, which reflected how dire the situation had become.

The company survived because it continued investing heavily in R&D even in the worst period. In one year, Tejas spent ₹80 Cr on R&D despite revenue being only around ₹200 Cr. That investment created the next generation of products and helped the company recover and eventually go public.

Why Strategic Autonomy Matters for India

The conversation introduced a clear idea. India cannot afford to rely on foreign technology for systems that power the economy. There are two reasons:

1. Highest Value Sits With Product Ownership: In electronics, value pools are skewed. If a product costs ₹100, around ₹60 goes to the OEM and they capture 75% of the total profit. The EMS player earns roughly 5% of value and around 2% of the profit. If India does not build product companies, it stays in low-margin, low-value zones.

   

2. Technology Denial Could Disrupt the Entire Economy: Most critical technologies used in India are owned outside India. Any major country can restrict access at any time. This can disrupt aviation systems, defence networks, telecom infrastructure, payment systems and logistics. The global environment is shifting rapidly. Countries are protecting their strategic technologies more aggressively. India needs to build its own capabilities in telecom, defence electronics, components and semiconductors to avoid systemic risk.

Semiconductors: India’s Missing Core Layer

Both Manish Ji and Sanjay Ji highlighted one simple truth. Without semiconductors, there is no real electronics strategy. Chips decide performance, value capture and strategic control.

Today India imports almost all critical chips, which creates three direct problems:

1. Low margin capture: Chip design and IP hold most of the profit. Assembly captures very little.

2. Vulnerable supply chain: Any disruption in chip access can stall entire industries.

3. Limited innovation: If controllers and SoCs come from outside, India cannot build differentiated products.

Where India Should Focus

Rather than trying to immediately build cutting-edge fabs, India should instead concentrate on achievable, high-impact layers:

1. Chip design and IP: India already has talent and global R&D centres. This is the fastest value-add lever.

2. Mature-node manufacturing: Nodes like 28nm and 40nm power automotive, defence and industrial electronics. These are realistic starting points.

3. Discrete and Analog Components: MOSFETs, Power ICs, RF parts and basic analog chips can be localised quickly.

4. Packaging and testing: OSAT capability is easier to build and supports the full ecosystem.

As Sanjay Ji said, technology denial is now as dangerous as supply disruption. Without semiconductor depth, India stays dependent in telecom, defence, automotive and AI infrastructure.

To truly become a product nation, India must build semiconductor capability step by step, starting where it has the highest leverage.

What Has Worked So Far: The AC Localisation Playbook

One of the strongest success stories is the localisation of air conditioners.

Around 2020, AC penetration in India was only about 5.5%. Local value addition was just 20 to 22%. Most high-value components such as compressors and heat exchangers were imported.

Industry leaders, including Manish Ji, aligned on a strategy. Instead of pushing for PLI on finished ACs, the sector requested PLI on components. This allowed domestic players to manufacture critical items with scale. Manufacturers agreed to aggregate demand, absorb initial cost disadvantages and use PLI incentives to support localisation.

The results have been impressive. In three to four years:

• Local value addition has increased from 20% to above 65%

• Millions of compressors are now made in India

• Most key components are manufactured domestically

• Jobs increased due to installation & maintenance needs

This demonstrates what is possible when policy, industry and demand come together with a long-term view.

EMS Evolution: From Assembly to Design Capability

EMS in India initially grew due to state-level VAT and excise incentives. Many firms were formed just to use temporary tax benefits. Many eventually faded away.

However, the successful EMS companies followed a different path. They invested in design and engineering, moved into ODM roles for selected categories and built deeper capabilities across camera modules, PCBs (Printed Circuit Boards) and sub-assemblies.

The future belongs to EMS companies that expand beyond assembly into design-led value addition. Scale is necessary but differentiation is essential.

The $450 Billion Opportunity Ahead

If the electronics sector reaches $450 Bn and India captures even 30% of that value through domestic production, the opportunity is enormous. The highest value sits in design, IP and high-end components. The top five companies in any deep-tech category usually take 80% of the profit pool.

India needs three key ingredients to compete:

1. End-to-end talent

   Hardware engineering, software, firmware, product design, supply chain and global sales need to come together.

2. Patient capital

   Deep-tech takes years to build. It needs sustained funding before revenue arrives.

3. Strong domestic first market

   Government procurement can accelerate adoption and help companies scale early. This is how both the US and China built their local champions.

PCBs & Components: The Big Unlock

India still imports about $5 Bn worth of bare PCBs/sub-assemblies. Even when final assembly happens domestically, the electronic blocks in some cases arrive pre-assembled from abroad. This makes it difficult to aggregate component demand and slows localisation.

There is now a coordinated effort to fix this. Components India can localise quickly:

• PCBs for consumer electronics

• Transformers

• Heat sinks

• Wire harnesses

• Basic electromechanical parts

These components cut across categories and represent a growing value pool. If India reaches $450 Bn in electronics production, components alone could become a $110 Bn segment. PCB manufacturing could grow from less than $1 Bn to around $10 Bn. This requires integrated clusters, consistent demand and long-term planning.

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Why India Needs Integrated Electronics Clusters

China’s success in electronics came from concentrated clusters where component makers, EMS firms, OEMs and logistics partners were tightly integrated. This improves speed, lowers cost and drives innovation.

India has early examples such as Sri City, but the ecosystem remains scattered. A cluster approach can significantly improve competitiveness in components and subsystems.

High-Potential Export Categories

According to Manish Ji, no category is fully mature yet because technology cycles keep shifting. However, several categories show strong export potential.

1. Air Conditioners: India has built component capability and manufacturing scale. Export potential is high.

2. CCTV and Surveillance Systems: Security standards and localisation requirements have reshaped the market. Domestic players are gaining ground and can become exporters.

3. Defence Electronics: India must build local capability here due to national security requirements. Growth rates are strong.

4. Small Consumer Electronics: Wearables, small appliances and IoT devices, especially where logistics costs are low.

5. Components and Subsystems: Heat sinks, transformers, PCBs and power electronics can become strong export categories if scale builds up.

India does not need to reinvent every technology. Mature technologies can be acquired through JV and TOT models. Emerging technologies need deeper R&D and strong domestic teams.

What India Must Do Next

Becoming a product nation requires a coordinated ecosystem. India needs to:

• Build products that solve real customer use cases and have large domestic consumption

• Cluster component ecosystems for scale

• Use government procurement to support early-stage companies

• Invest heavily in R&D & IP ownership

• Partner with Japan, Korea and Europe for advanced technologies

• Acquire overseas companies to accelerate time-to-market

• Develop MSMEs that feed into large OEMs and EMS players

• Shift mindsets toward long-term product creation

India has the market, talent and policy support. The next decade will determine whether India keeps assembling products for others or builds the world’s next generation of technology champions.

If India succeeds, the electronics sector alone can create lakhs of jobs, generate large export engines and deliver strategic autonomy in areas such as telecom, defence, computing and critical components. This is not only an economic opportunity. It is a national priority.

That’s all for today! We discuss this and way more in the podcast - tune in!

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It has risen in distinct waves over the past few decades, closely tracking shifts in consumer culture and identity signalling. In the 1980s and early 1990s, visible logos became symbols of success and aspiration as global luxury houses like Louis Vuitton and Gucci turned monograms into shorthand for wealth and status. The trend intensified in the late 1990s and 2000s, when branding became louder and more repetitive, mirroring an era of mass consumption and celebrity-led marketing.

In the 2010s, this trend found a new engine in streetwear and hype culture, with brands like Supreme and Nike using bold logos to create instant recognisability, scarcity, & social currency across digital platforms.

Social media further amplified this effect, turning logos into visual signals optimised for feeds and fast attention.

But as wardrobes filled up and trends cycled faster than ever, a quiet shift began to take place. Increasingly, consumers are stepping away from loud branding toward clothes that last longer, fit better, and feel more personal. This phenomena also explains why brands like LVMH’s Loro Piana (quiet luxury) & Hermes Birkin Bag sales are outperforming while loud-luxury peers like Gucci are suffering.

Even in countries like China, the idea of “Common Prosperity”, first articulated in the 1950s and was reintroduced by Xi Jinping in late 2021, focuses on encouraging modest and restrained lifestyles while discouraging overt displays of wealth. This shift attached a stigma to exaggerated, logo-heavy consumption that had earlier symbolised aspiration and success. Since then, consumer preferences among high-net-worth individuals have visibly evolved, with quiet luxury outperforming loud brands as discretion, subtlety, and understated quality increasingly became markers of status rather than conspicuous branding.

Quiet luxury as seen today is highly correlated with the return to classic and timelessness, as well as return to work and dressy, which includes tailoring. Luxury customers are now choosing fine materials and tailoring over large logos. And this global trend has helped ‘quiet luxury’ brands outperform the luxury sector sales ever since 2022, and are expected to continue outperforming through CY 2026-29 period as well.

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In India, the shift toward quiet luxury in apparel is still at a nascent stage. The market continues to be dominated by fast fashion, led by high-velocity international players that specialise in trend-driven, affordable apparel produced at scale. Brands such as Zara, H&M, Uniqlo, and Zudio capture mass demand through rapid inventory churn and everyday basics. At the same time, logo-forward global brands like Levi’s, Nike, and Puma continue to scale on aspirational branding, while emerging homegrown fast fashion labels such as Snitch are growing rapidly through trend responsiveness.

While forces keep India firmly tilted toward speed and visibility, early signals of a quieter, quality-led shift have begin to emerge. As per Forbes, just like in the rest of the world, quiet luxury in India is a form of social shorthand, a discreet signal recognizable only to those within the same elite circles.

“It’s often said that only the wealthiest 1%, the crème de la crème, can afford the quiet luxury aesthetic. In India, the top 1% accounted for over 40% of the country’s total wealth in 2023, up from about 25% at the start of this century, according to the World Inequality Database.” (source)

This backdrop opens up a compelling opportunity for premium apparel businesses offering custom-fit propositions, addressing a clear gap in the market by solving for fit while layering in personalisation & differentiated in-store experiences, with a focus on quality over visible logos. The result is deeper customer engagement, higher repeat behaviour, and the ability to build long-term wardrobe relationships rather than one-off transactions. This is where we are focusing on in today’s post.

We recently hosted a fireside chat with Bombay Shirt Company’s founder Akshay Narvekar as part of the ‘Singularity One’ series. The discussion offered a grounded look at how a consumer brand can be built patiently in India, with a focus on unit economics, customer trust, and repeatability rather than hyper growth.

Founded in 2012, Bombay Shirt Company (BSC) began with a differentiated proposition: making custom-made shirts accessible at scale. Over the last 14 years, the company has evolved from a pure made-to-measure brand into a multi-category menswear platform serving the modern urban Indian male. Today, it operates at the intersection of craftsmanship, data-driven decision making, and disciplined offline retail execution.

BSC’s positioning is deliberately conservative. Narvekar describes the brand as one that reinvents classics for the modern Indian. Rather than pursuing fast fashion or transient trends, the company works with established silhouettes and upgrades them through fabric quality, detailing, and customisation. This approach has allowed BSC to age with its customer. What began as an affordable alternative to bespoke tailoring has gradually shifted into a mid-to-premium offering as customer expectations around materials, fit, and experience increased. Pricing moved up not by design, but as a function of evolving quality standards.

The core customer today is the urban Indian male, typically aged 30 & above, spanning professionals, business owners, and senior executives. The product mix has expanded from formal shirts into occasion wear, wedding-focused collections, and everyday apparel, widening usage without diluting brand identity.

Historically, BSC paid limited attention to seasonality. Over the last two years, that has changed. Data began to show a consistent demand spike between October and February, driven largely by weddings and festive occasions.

Instead of counting on broad demand pickup, BSC started building products specifically for this moment, matching what it puts on the floor with what customers are actually looking for, showcasing how the company now uses data to shape product decisions, not just track outcomes.

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From 100% Custom to a Hybrid Model

One of the most significant strategic shifts at BSC has been the transition from a fully made-to-order business to a hybrid model that includes ready-to-wear.

For most of its history, 100% of BSC’s products were custom-made. Over the last year alone, ready-to-wear has scaled rapidly and now accounts for ~40% of total revenues. Management expects this share to increase further and potentially reverse the mix over time.

This shift is driven by changing consumer expectations. In an era shaped by quick commerce and instant fulfilment, a growing segment of customers prefers speed over process. BSC’s advantage lies in its data. Millions of historical measurement data points allow the company to design ready-to-wear sizes using empirical fit data rather than intuition. This reduces inventory risk while preserving customer trust.

Importantly, the shift is strategic rather than reactive. The company recognises that every business must evolve with its customer, even when it requires a fundamental change in operating DNA.

An Offline-Led Business with Strong Economics

Unlike many digital-first apparel brands, BSC is firmly offline-led. Roughly 80% of sales come from physical stores, with online contributing the remaining 20%.

This mix is intentional. Custom and semi-custom apparel requires consultation and validation. Customers prefer engaging with stylists, discussing fit and fabric, and receiving reassurance before purchase. The offline channel enables this service-led interaction.

What sets BSC apart is how its stores perform on the ground. Mature locations are consistently profitable and tend to stabilise quickly. Low returns and refunds reflect the trust customers place in the product and the in-store experience.

These store-level outcomes give the team confidence to grow thoughtfully. Expansion decisions are driven by how well a store works in practice, rather than by the pressure to scale fast, allowing the brand to prioritise consistency and long-term sustainability.

A notable example is the decision to upgrade existing stores instead of expanding footprint. In Bandra and Kemps Corner, BSC chose to move into larger, more prominent locations rather than entering new geographies prematurely.

These were capital-intensive calls, but they were driven by incremental revenue logic and payback discipline rather than expansion optics.

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Operating Discipline & Leading Indicators

Narvekar remains deeply involved in monitoring business health. Even after more than a decade, he reviews individual orders regularly. While this may appear excessive, he argues that looking at every sale provides immediate insight into demand trends, product performance, and service quality.

At a structured level, three metrics stand out:
• Net Promoter Score (NPS) as a leading indicator of customer satisfaction
• Revenue growth, tracked conservatively rather than aggressively
• Contribution Margin 2 (CM2), which captures profitability after marketing costs

CM2 is particularly important because it reflects the true health of the business post customer acquisition and servicing. Combined with disciplined fixed-cost control, it ensures profitability scales alongside revenue.

This approach reflects a clear understanding that BSC is as much a service company as a product business. The sales cycle does not end at checkout. Customers often receive products 7–10 days post order, followed by alterations if required. Satisfaction is only achieved when the entire cycle is complete, reinforcing the importance of operational consistency.

Founder-Investor Collaboration Beyond Capital

Narvekar highlighted the role of long-term investor partnership in shaping BSC’s trajectory. His association with Singularity began in 2015, with participation across every funding round since.

The most critical moment came in 2023, a difficult year for consumer businesses emerging from Covid amid tight capital markets. Singularity participated in BSC’s largest fundraise to date when external confidence was scarce. While capital was important, the larger impact came from operational input.

Drawing on experience from scaling consumer businesses from Mithun & Avnish, the partnership introduced sharper data discipline, clearer KPIs, and more structured operating processes. Narvekar candidly admitted that he initially resisted external advice, losing valuable time before accepting its merit. Once adopted, the business entered a different operating rhythm.

Two years on, operations now run with high predictability. The company is close to “autopilot” from an execution standpoint, allowing leadership to focus on strategic decisions rather than firefighting.

Measured Growth, Not Hypergrowth

BSC does not pursue hypergrowth. Growth has been consistent rather than explosive, supported by healthy margins and strong unit economics. Management is explicit that rapid scaling often compromises service quality, store selection, and brand integrity.

Currently operating around 34 stores, BSC plans to expand to approximately 100 stores over the next 3-4 years. Capital from the upcoming fundraise will be deployed primarily toward offline expansion, following the same store-level economics discipline that has worked so far.

Repeat customers already account for over 60% of sales, making CRM and cohort tracking central to growth strategy. Teams are empowered to prioritise customer satisfaction over short-term efficiency, reinforcing long-term lifetime value.

A Brand Built for Permanence

Perhaps the most defining insight from the conversation was Narvekar’s view on longevity. Bombay Shirt Company is not being built for a near-term exit. The ambition is institutional: to create a brand that outlasts its founders, rooted in trust, craftsmanship, and operating discipline.

Even the brand name reflects this intent. In an ecosystem often driven by speed and valuation milestones, BSC offers a contrasting case study. Sustainable consumer brands, the conversation suggests, are built by respecting unit economics, evolving with customers, and making hard decisions early.

For founders and investors alike, Bombay Shirt Company stands as a reminder that endurance, not acceleration, is often the true competitive advantage.

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Moving the Macro Needle

America runs on consumer spending. Personal Consumption Expenditures (PCE) accounts for roughly 70% of its total GDP. Therefore the biggest part of incremental GDP growth in their country every year is generally defined by this PCE/consumer spending trajectory. But the year 2025 has turned out to amongst strangest one - where the contribution to GDP growth by Information Processing Equipment + Software (famously called AI Capex) has added more to the GDP than consumer spending in H1.

Infact, estimates from S&P Global even suggest that 80% of the growth in USA’s final private domestic demand (i.e. GDP less net exports, government and inventory ) came from DCs and high-tech-related spending.

Ever since 30th November 2022 - the date since when ChatGPT got launched by OpenAI, the need for AI computation has been exponential compounding worldwide which is propelling the need for DCs. Back then only 10% of global DCs were actually dedicated for AI computation.

But now in 2025, more than half of centers (~53%) are built to handle the AI workload globally. Going forward, the AI capacity is expected to rise a further 3.5 times between 2025-2030. Mckinsey calculates that companies across the compute power value chain will need to invest $5.2 trillion into DCs by 2030 to meet worldwide demand worldwide for AI alone. They project total 156 gigawatts (GW) of AI-related DC capacity demand by 2030, with 124 incremental GW added between 2025 and 2030.

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How will that Capex be Spent?

For the $5.2 trillion of expected capex to be spent between 2025 - 2030, there are 3 types of stakeholders where this spending will be allocated:

• Builders (~15%): real estate developers, design firms, and construction companies that build, expand and upgrade DCs, such as global companies like DPR Construction, Mercury Engineering, and Indian companies like STT GDC India, Yotta Infrastructure, NTT Global DCs; and EPC players like AECOM, Sterling & Wilson.

• Energizers (~25%): companies that supply the electricity and cooling systems essential for DC operations include global utilities like Duke Energy and Entergy, as well as infrastructure and equipment providers such as Schneider Electric. Onsite power generators like Bloom Energy (USA) also fall into this category, and their suppliers like MTAR Technologies (India) are also part of the value chain.

• Technology developers & designers (60%): semiconductor companies that develop the chips powering AI workloads, such as NVIDIA and Intel, and computing hardware suppliers such as Foxconn and Flex

Apart from above mentioned 3 stakeholders, we also have Cloud Operators like Amazon Web Services, Google Cloud, that own and run large-scale DCs; and also AI Architects like OpenAI & Anthropic who are developing AI models. These 2 stakeholders represent the demand-side pull, whose computation requirements are driving significant spending.

Where is India in this AI Race?

Between 2013-24, global AI investments totalled over $1.3tn, with $0.6tn by private firms. US did $471 Bn in cumulative private AI investments, leading in most layers of the AI stack. China ranked second with $119 Bn, closing the gap in AI models.

India was at a distant #7 ($11 Bn)

US companies dominate the hardware as well as the cloud, making them indispensable in the AI ecosystem. Even in India, GenAI focused start-ups have started to emerge in this global backdrop, with ~900 startups as of June 2025, which was ~250 as of June 2024 and just ~50 as of June 2023.

But about 84% of investments in India are focused on application development, and c.88% of funding is flowing into application first ventures.

The infrastructure (cloud, compute) and services (data, MLOps, LLMOps) layers of the AI stack remain comparatively underfunded.

While application layer does match the country’s structural strengths (due to services orientation of our economy), infrastructure investments are rare due to their capital-intensive nature that requires certain scale. Foundational layers continue to be dominated by global hyperscalers and model providers, where as startups in India tend to build on top rather than compete head-on.

So, will India invest in Data Center Infrastructure?

Short answer: yes, it has to.

India constitutes 20% of the world’s population & produces 20% of the world’s digital data but only one-tenth of it is stored here in the country. Most of our data is actually sold to us in dollars after being processed by tech giants outside the country. Government has taken a note of this.

Therefore, while in countries like the USA the rising need for AI computation is the primary driver of rapid data center build-out, in India one of the key drivers today is regulation, which is pushing companies to set up infrastructure within the country:

• Regulatory push for data sovereignty: RBI (2018) and SEBI (2023) mandates require payments and financial-sector data to be stored and processed within India.

• Stricter control over cross-border data flows: DPDP Act (2023) strengthens personal data protection while empowering the government to restrict cross-border data transfers, reinforcing long-term data localisation trends.

• Policy-led infrastructure build-out: MeitY’s Data Centre Policy (2020) anchors India’s ambition of a $1 trillion digital economy by enabling large-scale investments in reliable power, connectivity, and domestic IT and power equipment manufacturing.

In fact, non-compliance of rules led to ban on Mastercard and Amex by RBI in 2021, which triggered a surge in demand for domestic DCs as firms rushed to localize data.

With ever rising data traffic that has grown (30x since FY17) driven by rising internet penetration as well as growing data usage + smartphone adoption, and the need to lower the latency by having the center near to customers makes it crucial to invest into this infrastructure.

Hence, India’s data center capacity is set to jump 5x to 8GW by 2030 over 2025, which could require facility capex of $ 30bn (ex. servers) fueling 5x jump, as per Jefferies.

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Some Big Bang Announcements

Hyperscalers have made many big investment announcements into India in 2025. Microsoft & Amazon announced plans to invest a combined $52.5 Bn in India over the coming years, with Microsoft committing $17.5 Bn to strengthen the country’s AI ecosystem & Amazon pledging $35 Bn to accelerate AI-driven digitisation to be spent by 2030.

Google as well has announced a $15 Bn investment to build an AI data hub. Intel has committed support for Tata’s semiconductor manufacturing plans, and Meta is reportedly exploring a data centre partnership in India linked to its Waterworth subsea cable project. It remains to be seen how much of these announcements will translate into actual on-ground investments.

But What Exactly goes Inside a Data Center?

A DC can be broadly categorised into two main segments:

1. Non-IT infrastructure (the building and support systems)

2. IT hardware (the computing equipment)

The non-IT infrastructure, which forms the physical shell and support systems of the DC, refers to the real estate, fundamental construction materials like steel and concrete, and basic electrical systems such as wiring and transformers. Furthermore, services like architectural design, engineering, and final system integration are primarily handled by domestic Indian firms.

Whereas, the high-value, performance-critical IT hardware that constitutes the core function of the DC, also called the servers. The single largest area of reliance is in advanced microelectronics, where essential components like CPUs, GPUs, and specialized AI processors are almost exclusively sourced from global suppliers in the US, Taiwan, and South Korea. While India has made early strides by setting up the right policies including PLI to bring investment in building this critical components/chips, we are still few year away from actual large scale commercial production of server components in India.

While India ramps up its DC capacity by 5x in the next 5 years, Jefferies expects about $30 Bn would be spent on Non-IT infrastructure. This will create downstream opportunities for companies related to Real estate, Electrical and power systems, Racks/Fitouts, Cooling systems and Network Infrastructure. The pie chart below gives a clear image of how the opportunity poor is split between players handling key component⬇️

Here comes the role of an EPC player that is focused on end-to-end execution, from design to commissioning. We shall discuss this next.

EPC - What Critical Role does it Play?

An EPC (Engineering, Procurement, Construction) company is responsible for turning a hyperscaler’s or enterprise’s design and capacity requirement into a live, operational facility, on time and within uptime specifications. In other words, they basically build the DCs for their clients & hand it over to them after commissioning is complete. Key roles of an EPC company includes:

1. Engineering: translating uptime requirements into design

2. Procurement: managing complex, long-lead supply chains

3. Construction & integration: execute & ensure redundancy paths work exactly as designed

4. Testing, commissioning & handover

The skill sets required for a data center EPC company are different from traditional ones. These companies are differentiated by their deep understanding of the technology and its subcomponents, strong design capabilities, established OEM partnerships, program management skills, with near-zero tolerance for error, and a proven track record of delivering such projects.

Singularity AMC’s investment in Sterling & Wilson DC is driven by the rapid expansion in DC capacity and the critical need for reliable execution capability to deliver it. Simply put, regardless of who builds the capacity or where it is located, a proven DC EPC player stands to benefit from the scale of this opportunity.

Why Sterling & Wilson Data Centers fits this Moment?

Sterling & Wilson DC is among a very small set of EPC players in India that can deliver end-to-end turnkey DCs, covering civil works, power, cooling, mechanical systems, integration, testing, and commissioning under a single execution umbrella. This matters because modern DCs are no longer modular construction projects stitched together by multiple vendors. They are tightly integrated systems where power, cooling, redundancy, and control layers must function flawlessly from day one.

S&W DC operates in a segment of the value chain that is both critical and capacity constrained. Over time, this has created credibility with hyperscalers, colocation providers, telecom operators, and enterprise customers, where delivery track record often matters more than price. In our view, once a data center EPC player is trusted to deliver a live facility at scale, repeat business and larger mandates tend to follow.

DC EPC is no longer about lowest-cost construction; it is about executing under compressed timelines with future scalability, along designing for uptime and redundancy. Global Hyperscalers are willing to pay a premium if an EPC contractor demonstrates deep in-house design capability, familiarity with global standards, and the ability to coordinate across OEMs, consultants, and hyperscaler specifications. These are not capabilities that can be built overnight.

Why EPC offers a Cleaner Bet on DC Growth

From an investor’s lens, the EPC layer offers a cleaner exposure to DC growth relative to owning capacity or betting on utilisation assumptions. EPC players benefit from capacity addition, regardless of who ultimately owns or operates the DC. This becomes particularly relevant in India, where DC capacity is expected to expand rapidly due to regulatory requirements, hyperscaler investments, and latency-driven localisation. Additionally, it is the only Indian DC EPC company with international execution experience, while others exist but generally do not undertake projects overseas.

The business tends to be asset-light, working-capital efficient, and driven by engineering skill rather than balance sheet size. Execution quality, not capital intensity, becomes the key differentiator here.

While India would continue to be dependent on imports of chips/servers which is the biggest cost component of a DC for sometime at least till the ecosystem develops, we believe an equivalent role an efficient EPC player plays in accelerating the ecosystem development & localization.

Bottom Line

The AI + cloud cycle is reshaping global infrastructure priorities. In the US, it is being driven by compute intensity. In India, besides AI, it is being accelerated by data sovereignty + regulation, leading to big hyperscaler commitments. Both forces point to one outcome: a sustained, multi-year build-out of data center infrastructure.

While much of the attention sits on chips, models, and cloud platforms, the physical layer that enables compute at scale is where capital is quietly being deployed today. Within that layer, companies that can reliably convert capital into live, compliant, high-uptime infrastructure stand to compound value over time.

Sterling & Wilson DC represents this execution capability. It is not a bet on any single customer, technology, or geography, but on the inevitability of DC build-out and the scarcity of proven execution partners.

That, ultimately, is why this category matters, and why this company fits our investing lens.

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We had the privilege of hosting Mr. Sunil Vachani, Founder and Executive Chairman of Dixon Technologies earlier this year at the Singularity Summit 2025, in a fireside conversation with Dr Ajay Kumar, former Defence Secretary of India.

From assembling CRT televisions to operating multiple mega-factories and partnering with leading global brands, the company has demonstrated that high-quality, large-scale manufacturing can be built in India. Dixon today is playing a central role in building domestic capability across mobile phones, consumer electronics, lighting, and emerging component ecosystems.

Highly recommended to view this blog on our website here.

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Early Conviction & the Belief in India

Mr. Vachani reflected that when the journey began almost 15 years ago as they narrowed their focus on contract manufacturing, the scale Dixon has achieved today was difficult to imagine. What drove the company forward was a conviction that India possessed strong fundamentals: deep engineering talent, competitive labour productivity and a willingness among global OEMs to partner when the right environment existed.

This belief intersected with policy support at the right time. Foundational ideas, including the now-famous warning that ‘electronics could surpass oil as India’s largest import’, helped shift national attention and accelerate early policy momentum.

Mindset as a Structural Barrier

When asked about the critical challenges in India’s manufacturing build-out, Mr. Vachani emphasised that mindset, more than capital or regulation, was the biggest constraint. Changing the mindset of government stakeholders, internal teams and ecosystem partners was essential in order to build confidence that India could execute at world-class quality and speed.

As national leadership aligned around manufacturing priorities, institutional support followed. Today, the challenge is to evolve from Make in India to Design in India, expand the domestic component base and foster an MSME ecosystem built for scale, not fragmentation.

Strategic Focus as an Inflection Point

A defining moment in Dixon’s journey came nearly two decades ago, when the company chose to exit its own branded consumer business and invest entirely in contract manufacturing. The branded business was profitable, yet spreading attention across two directions limited long-term capability building.

Choosing focus unlocked the ability to invest heavily in design capabilities, scale infrastructure and deep manufacturing competencies. This clarity later enabled Dixon to raise institutional capital and accelerate expansion.

Under the pilot PLI scheme for mobile phones, Dixon became the first company to achieve qualification thresholds and claim incentives under the PLI scheme. Mr. Vachani attributed this to a culture of empowerment, where division heads operate as accountable business owners with autonomy, speed and full financial responsibility. This internal model, supported by disciplined leadership from CEO Atul Lall and long-tenured partners across the organisation, has enabled Dixon to consistently execute complex factory build-outs in compressed timelines.

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China Plus One & Shift in Global Supply Chains

The recent US tariff announcements have renewed urgency across global supply chains. Rather than viewing these developments as disruptive, Mr. Vachani described them as one of India’s largest opportunities to date. Electronics exports from India have already crossed $30 Bn, driven primarily by mobile phones, and could expand materially as companies diversify outside China and Vietnam.

The goal now is to ensure that India does not miss this opportunity as it did in the previous relocation cycle, and to align industry and policy to deliver reliability, speed and capacity.

The conversation addressed industry concerns around low value addition in mobile manufacturing. While mobiles structurally have lower domestic value capture due to semiconductor dominance, other categories such as air conditioners, washing machines and lighting already demonstrate significantly higher value addition.

With new investments in display modules and camera assemblies, India is positioned to move from 18% to nearly 30% value addition in mobiles within the next 12 to 18 months, a milestone Vietnam took many years to reach. The component PLI and MSME participation are expected to accelerate this shift.

Desire to Become India’s Foxconn

After achieving success in mobile phones in recent years, two major adjacency on Dixon’s road map include:
• IT products including laptops, where India has a $15 Bn import substitution opportunity and more stable design cycles enable rapid scaling
• Automotive electronics, driven by the electrification shift where vehicles increasingly resemble computers on wheels

A new display module facility is under development, with backward integration under evaluation based on semiconductor policy alignment and subsidy support. Over the last five years, Dixon has grown revenue nearly seven times crossing Rs 40,000 Cr in FY25. At an expected compounded growth rate above 35%, the runway remains significant given the scale of the domestic mobile and IT hardware markets.

When asked about vision for 2035, Mr. Vachani mentioned Dixon’s north star is to be an extension of the customer, built on trust and operational excellence. If that continues, the eventual scale will exceed any forecast. Reflecting on influences that shaped his approach, he acknowledged the role of his late father, who launched India’s first colour television in 1983. Qualities of foresight, people focus and long-term conviction have guided Dixon since inception. His own role today, he noted, is to articulate direction, build alignment and empower leaders across the organisation.

The standing ovation that closed the session was a recognition not only of past achievement, but of the scale of opportunity ahead for India in electronics.

You can watch the complete video here.

Soon on Singularity One, we’ll dive deep into the Consumer Electronics industry, with two industry leaders breaking down the key intricacies, market shifts, and what lies ahead. Stay tuned and subscribe for more!

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But this challenge has a silver lining. India can now build a homegrown lithium-ion ecosystem from the ground up. A 400 GWh cell manufacturing industry can create almost $80 Bn in market cap, roughly equal to India’s entire listed auto ancillaries space today. This is where the opportunity lies. To explore the full thesis, check out the video below or read the summarised version in our blog:

In this edition of Singularity One, we focus on four ideas:

1. How battery demand is evolving, driven by EVs & grid storage

2. How China built an unbeatable supply chain

3. What India is doing through policy to catch up

4. Where investment opportunities lie in the next 5 years

At Singularity, we have deployed ~$200 Mn in the past eight years, backing founders with ambition, early conviction, and strong execution, especially in sectors shaping India’s energy transition. Our Operator-Investor framework is supported by Singularity Plus, a network of specialists in policy, technology, capital markets, and deep industrial domains.

While we invest across solar, transmission and distribution, biofuels, and commercial EVs, the area that excites us most today is batteries & battery materials. It blends high strategic importance with a decade-long investment super cycle.

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Why Batteries Matter Now?

Batteries power everything around us. From the camera recording the above video to the phone or laptop you might be reading this, lithium-ion chemistry has quietly become the backbone of modern life. In 2019, the Nobel Committee called lithium-ion batteries one of the greatest gifts to humankind and a cornerstone for a world beyond fossil fuels.

The global EV market has hit an inflection point. Battery prices have fallen by half in the last 2 years, shrinking the upfront cost gap with petrol vehicles. When buyers account for fuel savings and lower maintenance, EVs start becoming the cheaper option. In commercial categories like buses, delivery fleets, and taxis, payback can be as short as two or three years.

All this means is that EV penetration across categories will rise significantly, which in turn will drive big chunk of the demand for lithium-ion batteries.

Global EV Penetration: China Leads, Others Follow

China crossed a milestone last year where more than half of new vehicle registrations in some months were EVs or plug-in hybrids. Supply has exploded, giving consumers real choice across segments.

The US & Europe are at different stages, but both have seen a consistent increase in adoption over the last five years. The four drivers that unlock EV growth:

• Expanded supply
• OEM cost reductions
• Strong regulatory commitment
• Supportive ecosystem led by charging infrastructure & upstream materials

Where India Stands?

In India, the story is unfolding sector by sector.

Two-wheelers: By 2030, EVs could form one third to half of the market. Scooters already make up 37% of total two-wheeler sales and are leading electrification. EV bikes will follow the same curve with a slight lag.

Four-wheelers: Penetration is around 3-5% today, but could reach at least 20% by 2030, driven by supply expansion and urban use cases. Growth depends heavily on the pace of charging infrastructure roll out.

Buses: India has quietly become a global leader in electric buses. Almost all new state transport tenders are now electric, and adoption is rising in both public and private segments.

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India has already emerged as global leader within three-wheeler category India and electric trucks (LCVs + HCVs) are starting to show early green shoots. Across mobility, India will need more than 100 GWh of lithium-ion cells annually by 2030. Including stationary storage, this could rise to 130-150 GWh.

Why Storage Is Now a Grid Necessity

The need for grid-scale storage is no longer a theoretical concept. As renewable expand, they introduce variability that the grid must absorb.

A standard rule of thumb: for every gigawatt of solar and wind added, the grid needs around one gigawatt-hour of storage.

To meet India’s 500 GW renewable target, the country will need 250-300 GWh of storage capacity as well by 2032. More than 60 GWh of storage tenders have already been announced in the last 18 months, with 10 GWh under construction.

This is India’s storage moment.

At the same time, new applications like autonomous vehicles, delivery drones, industrial robotics, and edge AI are demanding high-density, lightweight batteries with better thermal performance. Autonomous vehicles can consume between 15 and 30% more energy because of onboard compute.

The global battery market is projected to grow from 1500 GWh to 4500 GWh by 2030.
India’s annual requirement will be around 150 GWh. Imports of fully built packs already cost around $1 to $1.5 Bn a year. Without localisation, this number could climb to $15 Bn.

This is the value we must capture domestically.

What India Can Learn from China’s Playbook

China’s rise wasn’t an accident. To break down this journey, we were joined by Alex Xie, Partner at BCG, who specialises in China’s automotive industry.

China began with a weak automotive sector. Foreign joint ventures brought in capital, talent, and technology, and domestic private companies soon emerged, often hiring veterans from these ventures.

The government recognised two realities that China depended heavily on imported energy, and catching up with global OEMs in internal combustion technology was nearly impossible. Therefore they made a decisive bet on EVs that included:

• Incentives for local battery companies
• A whitelist that ensured EV subsidies applied only to vehicles using locally produced batteries
• Scale-driven competition to drive down costs
• Tight alliances between OEMs and battery makers

Over time, this built the world’s largest and most integrated battery supply chain.

India does not need to replicate China, but we can borrow the underlying logic:
Tie industrial policy, capital, technology, & long-term scale into one coordinated push.

Breaking Down the Battery Supply Chain

A lithium-ion battery is built on five core layers: the cathode, the anode, the separator, the electrolyte, and the casing. Most of the value sits in the cathode, which contributes nearly 25% to 40% of the total cell cost, while the anode adds another 10% to 15%.

These two components drive performance and chemistry decisions, and anchor the economics of the entire chain. The process starts with mining and refining minerals like lithium, nickel, cobalt, and graphite, after which these inputs are converted into cathode and anode active materials. This step is technically demanding & concentrated among a handful of global players. The active materials then move into cell manufacturing, where electrodes are coated and assembled into cylindrical, prismatic, or pouch cells.

Packs are built next with thermal systems and battery management software, and finally, recycling feeds recovered materials back into the upstream stages. As the market matures, this loop will become essential for reducing dependence on mined commodities and stabilising supply for large-scale energy storage and EV demand.

Midstream: India’s Strategic Opportunity

The solar industry offers a clear analogy. In 2018, China controlled 95% of global solar processing. India had around 3 GW of domestic module capacity.

With policy support such as Basic Customs Duty, Approved List of Models and Manufacturers, and Production Linked Incentive, India is now set to reach:

• 150 GW of module capacity
• 75 GW of cell capacity
• $3 Bn annual profit pool
• $15 Bn in new market cap created in just five years

And this could double by 2030!

Now, same playbook applies to batteries. India is targeting around 130 GWh of domestic cell capacity by 2030. This requires $12–14 Bn in capex across the chain, with about $8–9 Bn for cell and pack manufacturing & $4–5 Bn for midstream materials like cathode, anode, electrolyte, and separators.

Players across the chain include Exide, Amara Raja, Ola Electric, Reliance, JSW Energy, HEG, Lohum, Epsilon Carbon, Himadri Chemicals, Gujarat Fluoro, Neogen, and Altmin. Some, like Epsilon and Gujarat Fluoro, are setting up capacities in the US as well.

Cell manufacturing is low margin, pack assembly is even thinner. Midstream offers pricing power, technology differentiation, and better profitability. We estimate around $1 Bn in annual profit pools, roughly $20 Bn in market cap creation on $4 Bn capex base.

This is where India can build a real moat. Here are the two companies we’re backing in this space.

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HEG: Strengthening India’s Upstream Material Base

HEG is traditionally known for graphite electrodes. That legacy matters because graphite is a critical building block in the battery world. Today, almost every lithium-ion battery in the world uses graphite for its anode. The global anode materials market itself is heading toward the $100 Bn range as battery manufacturing scales up.

India currently imports most of its battery-grade anode materials. This brings cost pressures, exposure to global price swings and vulnerability to supply disruptions. HEG’s move into battery-grade graphite and spherical graphite addresses one of the tightest bottlenecks in the entire value chain.

What makes HEG compelling is not simply the new product line but the capability behind it. They carry decades of manufacturing depth, process control, carbon handling and global export relationships. These foundations matter in sectors where quality, purity and consistency determine competitiveness. HEG is building exactly that foundation. It gives India upstream strength by producing critical processed materials that normally come from abroad. It also opens the door for downstream manufacturers to rely on domestic sources rather than imported supply.

In other words, HEG’s evolution is not a side business. It is a strategic capability for the country.

Lohum: Closing the Loop Through Circular Minerals

If HEG represents the upstream, Lohum represents the downstream and circular loop. The world is waking up to a simple truth: the fastest way to build domestic mineral security is to recycle existing batteries at scale. By 2030, India is expected to generate battery waste that runs into millions of tonnes annually. Waste becomes a resource when companies like Lohum exist.

Lohum’s model is based on recovering high-purity lithium, cobalt, nickel, manganese and graphite from used batteries and production scrap. These recovered materials are then refined into battery-grade inputs again, creating a domestic circular flow of minerals.

Recovered minerals reduce import dependence. They cut exposure to volatile international prices. They bring predictability to cell manufacturers that rely on long-term mineral supply. And they reduce the environmental footprint of new manufacturing.

The strategic logic is even stronger. No country can build large-scale cell manufacturing without stable access to raw materials. Circular supply becomes the most reliable buffer when global supply chains overload.

India’s Policy Push: What Needs to Happen Next

China’s rise was built on policy coordination. India is beginning to move in the same direction. Key initiatives include:

• PLI scheme for cell manufacturing
• 40 GWh of capacity allocated to Reliance, Ola, and others
• National Critical Minerals Mission with a 16,300 crore budget
• 1 lakh crore R&D and Innovation Fund for sunrise sectors

But the missing piece is still the Basic Customs Duty. Solar grew only after India implemented 40% duty on modules and 25% on cells. Battery materials need a similar cost parity push. For cell assembly alone, a 25–30% duty is needed for domestic viability.

Closing Thoughts

The battery ecosystem is moving from a phase of broad optimism to one of hard execution. Demand is real and accelerating, but the supply chain remains uneven, capital intensive, and deeply dependent on technological capability across materials, cell design, and manufacturing. India’s opportunity sits in entering the right nodes of this chain rather than trying to build everything at once. Companies like HEG and Lohum show that competitive strengths can emerge in very specific layers if the focus is sharp and technical depth is built early.

If you prefer reading to watching, this blog has captured the core themes from the conversation. For a fuller experience, you can view the video below.

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But the next big disruption in telecom isn’t happening on Earth - it’s happening in SPACE!

In today’s blog, we explore why space is gaining relevance and how India is positioned in this evolving landscape, covering the following aspects:

1. A Happening Space! - Agriculture, Satcom & more.

2. Thrust to Support - What role has government played?

3. Past, Present & Future

   1. Foundation 2015-2025: Earning Trust in Space

   2. Road Map 2025-2035: Learning to Live & Work in Orbit

   3. Vision 2035-2045: From Presence to Leadership

4. States Leading India’s Flight to Space

5. Global Funding Landscape

6. Convergence of Space & Defence

Today’s deep dive is a long one, recommended to read on our website here.

A Happening Space!

From communication to Earth observation to small launch vehicles, space is transforming how nations connect, monitor, and plan. As data from satellites becomes cheaper and more precise, it is powering new applications in agriculture, logistics, climate monitoring, and urban planning. In agriculture, satellite imagery combined with AI is helping lenders assess crop health and soil moisture in real time - enabling instant, low-risk loan disbursements to farmers within minutes, directly tied to ground data (which used to take many weeks earlier). ICICI bank was the first bank in country to use satellite data to power credit assessment of farmers. SBI’s chairman also confirmed recently about the bank exploring to use satellite imagery-based inputs for making its agri lending processes more efficient.

“40% of the Indian population are agriculturists and the annual farm lending alone is a USD 550 Bn opportunity with a lot of it cornered by the informal sector lenders”

- Manish Gupta (Google DeepMind) on ‘digital agri stack’ via satellite imagery

And India is also all set to have satellite communication as a telecom service very soon. Global leader Starlink which has 8,811 satellites in orbit as of 30th Oct, 2025 with plans to scale it to 42,000 satellites, is also now all set to start satcom services in India. They recently started hiring in Bangalore before their service launch.

“India will not only deliver the fastest satellite rollout in the world, we will also redefine what satellite communication means for humanity.”

- Telecom Minister Jyotiraditya Scindia (8 Oct, 2025)

Along Starlink, Bharti-backed Eutelsat OneWeb, and Reliance Jio-SES have also received GMPCS licences to start satellite broadband services in India. Together, these advances are turning space from a science-led domain into a commercially viable and strategically vital industry.

Thrust To Support

The role of government has been very crucial and supportive in nurturing innovation in this sector in recent years. Private participation in space is now institutionalized, with the Indian National Space Promotion and Authorisation Centre (IN-SPACe) acting as a single-window, independent nodal agency which functions as an autonomous agency in Department of Space (DOS).

Foreign Direct Investment has been allowed up to 100% in few sub-sectors, opening satellite manufacturing and components to global capital and supply chains. Two state-backed capital pipes are now live or announced, including a dedicated ₹1,000 Cr sectoral VC fund for space and a ₹10,000 Cr vehicle led by IN-SPACe to back 40 companies over five years, both aimed at directly supporting larger pre-seed and seed rounds and compressing the time to meaningful hardware milestones.

The startup base has scaled beyond the ‘dozens’ phase, with more than 200 space tech startups since 2020 and government citing 350+ startups as of mid‑2025. Few leaders have demonstrated initial success including Skyroot’s Vikram‑S suborbital launch, Agnikul’s semi‑cryogenic 3D‑printed engine progress and private launchpad, and Pixxel’s hyperspectral constellation backed by a strategic cheque from Alphabet of about US$36 Mn.

The space budget has almost tripled - from ₹5,615 crore in 2013-14 to ₹13,416 crore in 2025-2026, reflecting the government’s commitment to fostering growth in the space sector. India’s space economy was valued at US$8.4 Bn as of 2022, just 2% of the US$440 Bn global pie. But projections estimate this figure will grow fivefold to ₹3,75,320 crore (US$44 Bn) by 2033, capturing 8-10% of the global share (source).

Let’s have a look at how has the journey been in the last decade, and what lies ahead.

2015-2025: Earning Trust in Space

Over the past decade, India shifted from being admired for frugal ingenuity to being trusted for repeatable, complex missions, stringing together Mars Orbiter Mission’s landmark success, the Aditya‑L1 solar observatory launch, and Chandrayaan‑3’s soft landing that made India the first nation to reach the Moon’s south polar region and only the fourth to achieve a lunar soft landing at all.

As these headline moments played out, India also became a reliable launch partner for the world, with the PSLV family putting hundreds of foreign satellites into orbit and the heavier LVM3 flying increasingly ambitious communications payloads, expanding both technical range and commercial credibility. Behind the scenes, capabilities widened from pure launches and probes into operations that knit spacecraft together, with 2024-2025 docking demonstrations validating rendezvous and control of two satellites as a single entity, a building block for future servicing and space station work. A list of companies have now emerged which are acting as backbone of Indian space tech supply chain:

Policy thinking kept pace, elevating private innovators alongside ISRO and signalling that national self‑reliance would come from a blended ecosystem of public labs, private builders, and international partnerships rather than a single institution acting alone.

2025-2035: Learning to Live & Work in Orbit

India’s next phase in space is shifting from proving technologies to sustaining human presence and operations. The Gaganyaan mission, targeted for around 2027, is progressing through a series of abort tests, drop tests, and uncrewed trials aimed at systematically reducing risk before sending astronauts to space. Group Captain Shubhanshu Shukla’s space mission in June 2025 has already given India valuable operational experience in astronaut training, life-support systems, docking procedures, and in-orbit experiments. These learnings now form a practical playbook that ISRO can apply directly to Gaganyaan’s upcoming uncrewed and eventual crewed missions.

If timelines hold, India’s own space station ‘Bharatiya Antariksh Station’ is planned to come online by 2035, turning today’s docking trials into everyday operations like berthing, resupply, and microgravity research that serve science, industry, and diplomacy from low Earth orbit.​ Alongside human spaceflight, expect follow‑on lunar missions and advanced Earth‑observation programs to mature, while private companies take on a larger share of manufacturing and services so space becomes a broader industrial base rather than a sequence of one‑off feats.

India also aims to build a comprehensive space defence architecture anchored by an indigenous ‘Intelligence, Surveillance, and Reconnaissance (ISR)’ constellation, co-orbital capability demonstrations, and a centralized command and control centre for space operations. This integrated system will enhance India’s ability to monitor activity across borders and oceans, safeguard its satellites, and respond faster to emerging threats in orbit.

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2035-2045: From Presence to Leadership

Once a national station runs at full scale, orbital life becomes a habit rather than an exception, with India positioned as a hub for micro-gravity science, commercial testing, and international crews that tap a routine pipeline of launches, logistics, and on‑orbit servicing.​
ISRO’s long‑range aims include landing Indians on the Moon in the early 2040s and building the gateway capabilities that make deep‑space research and, eventually, interplanetary missions more practical, which is why today’s docking and human‑rating work matters so much. Building a space station for experiments and a gateway for interplanetary exploration, including landing Indians on the Moon, is a key goal.

Leadership in this phase is not just about flags and footprints, it is about setting norms and frameworks so space stays open and sustainable, which is why India’s expanding collaborations and policy voice are already treated as part of the mission plan rather than an afterthought.

States Leading India’s Flight to Space

State governments are taking a federal approach to leverage their competitive advantages to attract startups to set up facilities. In Sep’25, Andhra Pradesh awarded the contract to develop a ‘Space City’ to Skyroot Aerospace (expert in designing cost-effective launch vehicles for small satellites & founded by former ISRO scientists), who would set up India’s first space city in Tirupati (close to the Satish Dhawan Space Centre) with an investment of ₹400 crore. This follows the Andhra Pradesh’s Aerospace and Defence Policy, which was unveiled in June of 2025.

Karnataka state, on other hand, with its deep aerospace legacy and ISRO’s presence in Bengaluru, is firmly positioning itself as India’s space tech powerhouse. Through the draft Karnataka Space Technology Policy 2024-29, the state aims to capture 50% of India’s space market and 5% of the global space economy. To achieve this, it plans to attract investments worth ₹25,590 crore (about US$3 Bn), create a dedicated space production cluster, and support over 500 startups and MSMEs with funding, intellectual property assistance, and quality certification. The policy also focuses on workforce development, targeting the training of 5,000 professionals, including 1,500 women, to prepare for future roles across the domestic and global space sectors. Built on Bengaluru’s leadership in new space startups, research institutions, and ISRO-linked infrastructure. These state policies cover aspects related to key segments of the space:

• Downstream - applications & services on Earth that use data or signals from space

• Midstream - involves operations in space through managing satellites & maintaining communication networks

• Upstream - design, manufacture & launch side of space activities, everything required to get into space

Within these, Manufacturing (includes payloads, subsystems, components), Launch Vehicles (includes rockets, propulsion, testing) along with Earth Observation (EO) are amongst the biggest categories. India plans to have ~119 Earth-observation satellites by 2040 with an estimated investment of ₹40,000-70,000 crore (~US $5-8 billion) in manufacturing and launch. Ground Station as a Service (GSaaS) is another emerging area, a cloud-based model that allows satellite operators to access and control their satellites without building or maintaining physical ground stations.

Tamil Nadu has also joined the race with equal ambition through its newly approved Space Industrial Policy 2025, which aims to establish the state as a manufacturing and innovation hub for the space economy. The policy targets ₹10,000 crore (US$1.17 Bn) in investments and the creation of 10,000 high-value jobs across manufacturing, space-tech services, and downstream applications. A key element is the development of dedicated ‘Space Bays’ in Madurai, Thoothukudi, Tirunelveli, and Virudhunagar - specialized industrial clusters designed to support both early-stage startups and established companies across the space-tech value chain. With incentives such as quick approvals, capital subsidies, and proximity to ISRO’s upcoming launch and propulsion facilities at Kulasekarapattinam, Tamil Nadu is building strong competitive advantages. Industry players like LMW, L&T, Agnikul Cosmos, and GalaxEye already anchor this ecosystem, reinforcing the state’s strategy to become a high-tech aerospace and satellite manufacturing hub.

Global Funding Landscape

SpaceTech has continued to outperform the broader global VC landscape. The Seraphim Space Index, a key barometer that tracks global venture investment activity in the space sector on a 12-month trailing basis, confirms this trend. While overall VC funding has partially rebounded in recent quarters, driven largely by big AI-related rounds, deal activity continues to decline, reflecting fewer but larger investments. Capital flowing into space tech is now approaching levels last seen during the 2021 SPAC boom.

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While funding is trending upwards, it is crucial to note that Indian startups are yet to make a mark in terms of big funds backing them with significant capital. For example, of the top 20 deals that happened in H1 2025, none of the investments took place in India. In US, listings of Voyager Technologies on NYSE in June’25 and Karman Holdings earlier in 2025, have showcased that public markets are now once again open to space companies and therefore has encouraged more funds chasing returns in select global markets.

Big Tech names are also investing in this space. Amazon is investing up to US$10 Bn in their Project Kuiper and aims to begin commercial internet service later this year. Google has launched Project Suncatcher to build scalable machine learning compute systems in space, harnessing more of the sun’s power - as AI continues to suffer from sustainable power supply. Meanwhile, China is accelerating its own efforts to compete in the satellite internet race. The state-backed ‘Guowang Network’, envisioned as China’s answer to Starlink, is targeting a 13,000-satellite constellation. They launched the third and fourth batches in Q2 2025.

Convergence of Space & Defence

Space is no longer a separate frontier from defence, it is becoming the digital and operational backbone of how modern militaries function. Real-time surveillance, secure communication, and orbital monitoring now depend on satellite-based systems, turning space into the new high ground for strategic advantage. This shift is also reshaping global defence investments, with more funding flowing into technologies that connect land, air, sea, and orbit.

In Nov’25, ISRO launched India’s heaviest communication satellite CMS-03 from their ‘Baahubali’ rocket LVM3-M5 and placed in the intended orbit with precision. Made for Indian Navy, a 4,410 kg multi-band communication satellite with coverage over a wide oceanic region, including the Indian landmass, designed for providing communication services for at least 15 years.

Globally in recent quarters, companies such as Anduril, which raised $2.5 Bn at a $30.5 Bn valuation, and Saronic, which secured $0.6 Bn at a $4 Bn valuation, have shown how defence innovation increasingly relies on space infrastructure. While not purely space companies, their partnerships with firms like Impulse Space and Apex highlight a growing overlap between defence and spacetech.

Anduril is developing orbital surveillance and threat detection systems, while Saronic aims to use satellite-enabled mesh networks to coordinate autonomous fleets.

Together, they show that space is no longer a supporting layer of defence but a core part of it, enabling faster decisions, persistent awareness, and resilient communication in a world that demands both speed and precision.

Bottom Line

Space is fast emerging as the next big frontier for innovation and economic growth. What was once a domain of government-led exploration is now opening up to private enterprise, new technologies, and global collaboration. India’s space journey has evolved rapidly, with policy clarity, stronger institutional support, and a growing ecosystem of startups building capabilities across launch, satellites, and data applications. The coming decade could see India transform from a reliable launch partner to a full-scale space economy driving innovation, commerce, and national capability.

We at Singularity AMC are deeply committed to advancing India’s strategic autonomy in space by supporting ambitious companies that have the courage to innovate and create lasting impact in this domain. We shall be coming up with a follow-up blog (Part 2) covering our perspective from an investor’s lens soon - stay tuned!

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For him, grit is the real differentiator. Entrepreneurs will face endless setbacks, but the instinct must always be to push, to find another path. Watch the session here:

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“As an entrepreneur, you never take no.”

Growth, Mr. Mariwala says, is the oxygen of a company. It keeps employees challenged, partners energised and customers excited. And the belief in growth must start at the top. Marico’s early journey focused relentlessly on gaining market share. But once leadership was secured, a shift had to follow: expanding the market itself. From changing traditional consumer habits to introducing new usage routines like “one hour champi before shampooing”, the company focused on category conversion rather than competing on price.

“Once market share is high, the challenge is to increase market size.”

A key strategy was avoiding battles where Marico could not lead. They chose categories in which they could achieve scale, pricing power and margin strength. Today, nearly 95% of their portfolio sits in categories where they are the market leader.

International expansion brought another growth engine. It moved from a part-time assignment to a fully accountable business once Marico hired a dedicated leader with zero domestic responsibilities. That clarity helped the company build strong positions across the Middle East, Egypt, Bangladesh, South Africa and Vietnam. These global pieces now contribute close to a third of revenues and offer a training ground for future P&L leaders.

Across the conversation, one theme is constant: build foundations that last. FMCG, he believes, is a defensive sector that can sustain over decades if guided by the right governance, strategy and culture. Boards must spend less time in the weeds and more time ensuring exceptional leadership at the helm.

3 Lessons for Founders

• Growth is a mindset. If leaders signal it, organisations respond.
• Become market leader or don’t enter. Leadership creates pricing power and resilience.
• When share maxes out, expand the category. Change behaviour, not just products.

In his fireside chat with Mr. Mithun Sacheti, he opens up about his own role today. After stepping back from daily operations, he didn’t want idle time or passive philanthropy. Instead Mr. Mariwala embraced what he calls active giving - contributing time, knowledge and energy to causes he believes in.

Through Ascent Foundation, he helps entrepreneurs learn from each other in a trusted peer community. Through the Marico Innovation Foundation, he backs ideas that push India’s innovation frontier. And through their mental health work, he supports critical access in smaller towns and underserved communities.

“I cannot do the art of doing nothing. I need to be involved and passionate about what I support.”

Purpose, he believes, must evolve with the entrepreneur - but the drive never switches off.

It’s a conversation packed with grounded wisdom, category-building lessons and a rare look at the mindset behind scaling ideas into institutions. For anyone building or backing brands in India, this conversation stays with you long after it ends.

Watch this discussion here.

At Singularity AMC, we’re actively capitalizing on opportunities in the electric commercial vehicle (E-CV) sector through our investments.

We believe that for growth stage investors like us, attractive challenger OEM (Original Equipment Manufacturer) opportunities lie in high-utilization E-CV segments such as buses, light and heavy-duty trucks, and tractors.

Here is a quick snapshot of our thesis:

Our portfolio companies are demonstrating execution at scale. PMI Electro Mobility has secured a top three position among peers, with more than 2,500 e-buses deployed across 31 Indian cities, covering over 20 crore electric kilometers annually. At the same time, Qucev is seeking to lead electric trucks category with both a 3.5-ton Light CV and a 55-ton Heavy CV. Strategic partnerships and technology transfer arrangements with global players such as Foton, BYD, and CALB further strengthen the right to win for both PMI and Qucev.

Today’s blog is a bit more detailed, recommended to read it on our website here.

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When it comes to categories like electric 2/3 wheeler, India along with China & Southeast Asia, is one of the world’s largest markets, accounting for around 80% of 2024 global sales. Electric 2/3Ws stand out as the most affordable and accessible entry point into electric mobility and serve as primary mode of private passenger transport in India and Southeast Asia. But on other side, electric penetration levels are less 3% when it comes to Light Goods Vehicles (LGVs)/ Heavy Goods Vehicle (HGVs). This blog explores how adoption is evolving across key categories.

India’s Leadership in Electric 3Ws🛺

In 2023, India overtook China to become the world’s largest market for electric 3Ws, and it maintained this position in 2024, with sales growing ~20% YoY. This translated into a record 57% electric sales share in the country.

Policy support under the new PM E-DRIVE scheme, which allocated budget in 2024 to support the roll-out of more than 300,000 electric 3Ws for commercial use has helped. When one looks at leading companies, the biggest share is held by legacy players like Mahindra and Bajaj, with 70% market share in the E-3W transport (non e-rick) segment and around 60% in the overall 3W market.

In just the first 8 months of 2025, the penetration of Electric 3Ws (non e-rickshaws) has grown by a healthy 10% points, from 26% to 36%. Within that, legacy players have not only maintained but even gained further share against new-age companies in the space. Therefore, the scope for new OEMs to emerge and take away market share from legacy players in this category has been extremely limited. Large corporate-backed players (like Montra – TI Clean by Murugappa Group) are the only credible challengers to the incumbents in our view.

Even financiers are increasingly directing their disbursal towards incumbent OEMs with established track records rather than newer entrants.

Larger players continue to command the bulk of fresh disbursal, reflecting financiers’ preference for scale, reliable service networks, and stronger warranty frameworks. This reduces risk, as evident from their relatively lower gross NPA ratios compared with newer competitors.

In contrast, financing support for emerging players has steadily declined in recent quarters due to concerns around higher delinquency levels and weaker after-sales reliability. This highlights how incumbents continue to lead the electric 3W market, with financiers reinforcing this momentum by backing their purchasers.

The three-wheeler (3W) segment had some of the lowest barriers to entry in the EV market. From an engineering standpoint, 3Ws are far less complex than two-wheelers or cars, and setting up manufacturing requires minimal capex.

This made it easy for new players to jump in. For challenger OEMs, the real edge often came from design, engineering and tech-first approaches, essentially building ‘smartphones on wheels’. But beyond the product, they lacked advantages in critical areas like distribution, branding, financing, service networks and supply chain efficiency.

That is where incumbents like Bajaj had the upper hand. They waited on the sidelines as consumers tested EVs and grew comfortable with the idea. Once adoption began to take off, Bajaj quickly rolled out new models and leveraged its massive distribution network to capture market share.

Electric 2Ws 🛵Rise, Profitability Catching Up

India has witnessed an exponential rise in electric 2-Ws since 2021 and has now become the second-largest market in terms of vehicles sold, after China. The country hosted 220 OEMs in 2024, up from 180 in 2023, although the top four market leaders together accounted for 80% of the 1.3 million electric 2-Ws sold that year.

Affordability, driven by government subsidies, reducing battery prices and supply chain optimisation, has been the biggest contributor. Policy support is also helping bridge the affordability gap through the PM E-DRIVE scheme (earlier under FAME-II and the Electric Mobility Promotion Scheme), which offers purchase subsidies of up to INR 5,000 for 2-Ws fitted with lithium-ion batteries.

In terms of penetration levels within the segment, we have seen a steady increase over the last 5 years where the sharpest increase happened from 2% to 5% from 2021 to 2022, followed by a rise to 7-8% in following years.

Recently in Q3 CY2025, the penetration touched ~10% led by the top OEMs namely TVS Motors, Bajaj, Ather & OLA.

Though, with GST rate cuts on petrol/diesel 2W (ICE) which have made them relative more affordable vs their EV counterparts can impact penetration levels in short term but long term trend remains intact.

On the profitability front, it is worth noting that gross margins have continued to expand quarter after quarter, and is now reaching at par with incumbent OEMs. While incumbent players are yet to achieve sustainable profitability, Q1 FY26 results for Ola’s auto segment, EBITDA improved to -11.6% compared to -90.6% in preivous quarter, and June marked ‘the first EBITDA-positive month for the auto business’. On other side, Ather reported an EBITDA loss of (-)16% in Q1 FY26, improving on QoQ & YoY basis.

In terms of market share, challenger OEMs are finding it difficult to incrementally break into the top five. Established players such as Hero Electric are becoming increasingly aggressive to defend their position, while newer entrants like Bgauss/River Mobility might struggle to get into the Top 5 by volumes, but can create leadership in niche use cases. We’re also watching how electric bikes evolve with Ola’s launch, as challengers like Tork have so far been unable to make significant inroads.

Why India’s Electric Car🚗 Adoption Lagging Globally?

In India, 98% of the vehicle fleet comprises either small vehicles (2-wheelers or small cars), public transport, or goods vehicles. Only about 2% of vehicles are larger cars costing more than INR 10 lakhs. Since most EV cars are priced well above this threshold, affordability remains a major challenge for mass adoption. The base model of India’s best-selling EV in FY2025, the MG Windsor EV, starts from INR 14 Lakh on road. Therefore India’s EV Car penetration continues to be ~3% in both 2023 and 2024.

Compare this with Thailand. With high imports of affordable Chinese battery electric cars at prices often lower than average price of a conventional car in Thailand, EV penetration suddenly jumped from 3% in 2022 to 13% in 2024. Similar has been the case with multiple South East Asian countries where the adoption has seen sharp increase as shown in graph below. But, India continues to have high % of taxes on car imports.

Another key aspect is charging station availability. As of 2024, India had one charging station for every 14 cars, which is relatively healthy compared to some major countries, yet EV penetration has remained stagnant at just 2 to 3%.

EV four-wheeler penetration in India remains an unsolved puzzle. Despite adequate charging infrastructure, adoption has yet to take off, largely due to high price points and the heavy capital investment required from OEMs.

How e-Buses🚌 Continue to Gain Momentum?

India has seen rapid growth in electric bus deployment since 2020, with stock increasing from less than 3,000 to more than 11,500 at the end of 2024, and penetration hovering around 4% - 5%.

Demand has been boosted by schemes such as the National Electric Bus Programme, which targets deploying a further 40,000 electric buses by 2027, helping to generate large orderbooks and use aggregated procurement to drive down costs. This is further strengthened by new schemes such as PM E-DRIVE, which could support sales of a further 14,028 electric buses, with preference given to replacements of old public buses. The forthcoming Bharat Urban Megabus Mission aims to introduce 100,000 electric buses to cities with a population of over 1 million.

This is why India’s share of global electronic bus sales continues to rise (yellow part).

By setting up Convergence Energy Services Limited (CESL) which acts as a central aggregator and program manager for the procurement of electric buses across India, government is ensuring improved procurement of EV buses at better prices at scale. Therefore, about 37,000 e-buses are expected to be tendered between FY26 to FY28 period from multiple states.

From a cost perspective, the total cost of ownership (TCO) for electric buses is now competitive with diesel alternatives, with estimates showing operational savings as battery technologies have matured, resulting in increased reliability and longer lifecycles.

Electric buses cost about ₹7 less per kilometer than diesel ones, mainly due to lower fuel and maintenance expenses, operating at around ₹49 versus ₹56 per kilometer for diesel bus.

Alongside, high likelihood of future stricter emission norms or diesel bans in metros, Corporate ESG Mandates for their staff transport, and many segment specific triggers continue to help improve penetration of EV Buses.

Green Shots in Electric HGVs & LGVs🚛

Heavy Goods Vehicles (HGVs) & Light Goods Vehicles (LGVs) are the commercial trucks & other vehicles, used primarily for transporting goods making them vital for freight industry. Long-haul, heavy-duty trucks are often considered one of the hardest-to-electrify vehicle segments due to the need to balance battery size, range and payload constraints with charging requirements. The upfront cost of a battery electric truck is generally 2 to 3 times that of a diesel truck.

Therefore the penetration in this category have been very low. In India, in CNG and Electric HGVs make less than 3% of the total sales, with diesel dominating at 97% market share. And when it comes to Electric LGVs, its share is now ~3% in 2025.

Government is keen to kick start the early adoption of e-trucks and therefore have allocated Rs 500 Crores for purchase of 5,643 e-trucks under PM e-DRIVE scheme launched in 2024. The environmental angle (read carbon emission) is even more crucial here.

Medium and Heavy-duty trucks comprise 2% of the total vehicle population but contribute to 45% of the overall vehicular road transport emissions. (source)

Early green shots are visible. In Nov ‘24, India’s biggest cement major, UltraTech Cement ordered 100 electric trucks to decarbonize a 400 km route between two of their operations, and orders for 180 electric trucks from Billion E-Mobility (including 45 with a gross vehicle weight of 55 tonnes) have spurred Ashok Leyland to increase their production capacity.

India’s fast-growing economy and expanding e-commerce sector are now amplifying demand for cleaner, cost-effective, and reliable commercial EVs. In November 2024, Amazon India launched ‘Laneshift Project’ to test long-range electric trucks on the 350km Bengaluru-Chennai highway.

With government support & increasing early adoption from corporate, electric HGVs/ LGVs, and Buses have fertile grounds for challenger OEMs and that’s where Singularity Growth Fund is investing.

Portfolio Success Stories: PMI Electro Mobility & Qucev

PMI Electro Mobility stands out as a portfolio leader, specializing in electric buses. Leveraging a strategic partnership with Foton for core EV technology & benefiting from robust government schemes such as the PM-eBus Sewa, PMI has emerged as the market leader.

As of Aug 2025, PMI continues to lead in number of deliveries YTD (649), followed by Switch Mobility (622) and Olectra (553).

PMI has delivered more buses YTD (649) than it did in CY24 (534) and commands about 17% of India’s e-bus market deliveries since 2020. The company’s growing order book (currently ~2,600 buses) with target of 15,000 new orders wins in next 2 years, along an expanding manufacturing capacity (3,000 buses per year). Company is focusing on backward integration, enabling margin expansion and supply chain stability. PMI's manufacturing strategy going forward involves strengthening bus body fabrication facilities, and assembly of core EV components like Battery pack, Motor, Software, 6in1 - tapping maximum localization.

In the commercial vehicle segment, Qucev is emerging as a promising player focused on commercial EVs with potential to drive electrification in the HCV category. It is making inroads in the CV category with 3.5 Ton LCV and 55 Ton HCVs. Partnerships and Technology transfer arrangements with global players like Foton, BYD, CALB give a right to win for PMI and Qucev.

Singularity AMC is well-positioned to capture emerging value in these sectors by fostering domestic EV component production (read ecosystem) to reduce import dependency. Key investment opportunities do exist in manufacturing critical components such as battery cells, battery management systems (BMS), electric motors, and power electronics.

Therefore, when it comes critical components that goes into lithion-ion battery of EVs, we have the privilege of investing in HEG Ltd which is into graphite (anode) and Lohum which is into lithium-ion battery recycling (cathode).

Bottom Line

India’s EV adoption is moving fast. We have emerged as world leader in electric 3W adoption and is doing well in electric 2W with growing number of OEMs entering the space. While affordability continues to be a key concern in electric 4W, the e-buses category is taking off in a big way. When it comes to E-HGVs & E-LGVs, considered one of the hardest-to-electrify vehicle segments, there are multiple green shots implying that time is ripe for penetration to increase here too.

Singularity AMC will continue to be at forefront in this space to accelerate India’s adoption of EVs.

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Launched in 2016 by the National Payments Corporation of India (NCPI), you can pay merchants, or send money to friends in real time with just a few taps. Its appeal lies in its speed and ease of use, and therefore processing over 20 Bn transactions every month in India (as of Aug ‘25), and growing 32%+ YoY. It has led whole digital ecosystem growing rapidly, reaching more than 600+ banks and more than 200+ apps.

And one of the biggest impact it has had is in form of reduced requirement to have cash in your wallet. It takes away the need for regular cash withdrawals from the banks & ATMs, and therefore also a stagnation/negative trend in the existing ‘Currency in Circulation’ in India’s economy as the IMF chart shows below. In fact in 2024, RBI introduced UPI cash deposits at ATMs, slowly eliminating the need to carry a debit card.

UPI’s success truly lies in its sheer scale, now serving nearly 500 million users and over 65 million merchants across India. Compare this scale with 108  million users of credit card (unique users ~40-50 Mn) users which is accepted at just 25 million merchants in India. With government subsidizing the cost of operating UPI in the country, leading to wide adoption from both customers and vendors who don’t have to pay any per transaction charges that are generally paid in case of a credit card (by the merchants).

Credit card penetration estimated at <5% of the total population (i.e. <10% of adult population), whereas in United States, around 82% of adults own at least one credit card. Even countries like Brazil have a credit card penetration of over 33%.

Now credit is one area where UPI could potentially have a big impact where it fulfils the role that credit cards plays world wide, i.e. Democratization of Credit.

Government data shows that by 2021, about 96% of households had at least one member with a bank account. However, credit penetration, the asset side of banking, has lagged. Despite the surge in account openings, India’s financial inclusion ranking remains below peers like Brazil, South Africa, and Russia. When compared to developed world, the differences are stark! World Bank estimates India’s private credit-to-GDP ratio at just 55%, far below the 162% average of other four largest economies. This deficit translates into a lack of growth capital, stifling entrepreneurship and household economic mobility.

The lack of credit score and credit history for unserved consumers is an impediment for getting credit opportunities, as many lenders are hesitant to extend credit to consumers without any credit history or score. For these traditionally unscorable consumers, they face a “chicken or egg” conundrum of how to get that first credit product when they lack a credit history.

Now, the UPI can solve this so called ‘trust’ problem and this is what we shall be discussing in the blog later. Before that we discuss how need for retail credit is bound to triple from 2024 to 2030.

India’s Credit Gap

India’s economic story is increasingly being defined by its hunger for credit. As of FY25, the total retail credit in India stood at ₹82 lakh crore, reflecting a strong CAGR of 15.1% between FY19 and FY25. For the upcoming years, it is expected to increase 14-16% between FY25 and FY28. Consumers across the country are embracing new borrowing options, from credit cards and personal loans to digital lending platforms. With a population that is becoming more urbanized and aspirational, India is only scratching the surface of what is possible in terms of credit penetration.

Although personal loans and credit card spending have surged in recent years, India’s household debt to GDP ratio remains notably below that of other emerging market economies (EMEs). India’s ratio hovers around 41-42%, while EMEs tend to be around 46-50%, reinforcing that Indian households are not over-leveraged and the credit cycle has a long run to complete. With rating upgrades flowing from global agencies, financial resilience allows policymakers and lenders to deepen credit penetration without triggering systemic risks, further strengthening the case for sustained credit growth in India.

If one looks at macro level, India's overall credit-to-GDP ratio was 93% in CY2024, compared to 138% for the United Kingdom, and 198% for China, and is not expected to rise due to fiscal prudence of central government to bring down the fiscal deficit further.

India’s composite Financial Inclusion (FI) index to measure and evaluate the extent of financial inclusion too has improved substantially from 49.9 in 2019 to 64.2 in 2024 indicating progress in deepening of financial inclusion led by rapid digitalization and fintech proliferation.

But an estimated 451 million Indian adults still lack access to any formal credit facilities, according to TransUnion CIBIL data from 2025. Credit availability to underserved Indians remains among the lowest globally - even after a phenomenal 12x growth in digital disbursements between 2017 and 2022. For example, India’s retail credit penetration at 11% is significantly lower than 55% in China or 75% in the US. Deep divides remain between urban and rural segments, as well as between genders and income brackets.

“There are approximately 5 crore unique credit card holders, there could be roughly 50 crore UPI users. A secured credit card could be offered to 30 to 40 crore users at least…”

- Rohit Chhibbar, Paisabazzar (ET - Sep’25)

With rise of digital payments in the country, can data provides valuable real-time insights into an individual's financial behavior and transaction patterns, enabling lenders to make more accurate and timely credit risk assessments? This could essentially help in streamlining loan approvals and enhance lending decisions, benefiting both borrowers and lenders alike - and therefore solve the lower levels of credit penetration in the country.

Can Transaction History Impact Creditworthiness?

Getting a premium credit card in India as a newbie is tough. If you have never applied for a loan, you have a limited credit history, it makes assessing your creditworthiness difficult and therefore most of the times, banks would recommend you to apply for beginner credit card with limited benefits.

“In the US, even a student will start using a credit card, because they want to build their credit identity so in the future when they go on to buy a house, they have a mature score that is available”

- Praveena Rai, COO, NPCI (source)

Traditionally credit products in India have faced limited reach due to challenges in access and distribution. Biggest hurdle of them is that India’s credit scoring largely depends on past credit history, excluding many rural and under banked populations who lack formal data.

However, the rise of digital payments is opening new doors for assessing creditworthiness. Transaction data from digital platforms offers valuable insights into income levels, spending patterns, and overall financial stability. Additionally, timely bill payments and active participation in savings platforms can signal strong financial discipline. While integrating such alternative data sources can broaden credit access, it also raises important concerns around privacy and bias. This calls for robust ethical standards and regulatory frameworks to ensure lending practices are fair, transparent, and non-discriminatory.

Research has found that transactional history along salary could be good enough way to access credit risks UPI Credit line could be relatively low riskier way of disbursal for lenders as they are able to. - Open Banking and Digital Payments: Implications for Credit Access

Innovating around building new credit algorithms alongside digital loan distribution & collection systems will be key to truly expanding credit access across India.

Therefore in 2024, NPCI, proposed the concept of Digital Payment Scores (DPS) as a tool for lenders to assess the creditworthiness of borrowers via their digital transaction history. DPS would analyze an individual’s digital payment behavior, including factors like transaction frequency, volume, and patterns. This data-driven approach aims to provide lenders with an alternative risk assessment mechanism, supplementing traditional credit scoring models.

With the need to build a credit identity and create an awareness about credit score lacking in India, DPS can potentially solve the problem. While NPCI is still working on the concept, it would be interesting to see how big could be the potential impact of the same on increasing penetration.

How Does It Impact Traditional Banking?

One of the key highlights in recent years in Indian banking has been how retail loans have been growing much faster than overall system loan growth. With rising incomes that enables more consumers to access credit for vehicles, education, and lifestyle needs, and increasing urbanization along growing middle class, now ~55% of India’s household borrowings are in form of retail loans.

While India’s retail credit penetration hovers around 11%, it is significantly lower than 55% in China or 75% in the US. Access to retail credit still relies heavily on physical branches due to most lending happening via traditional banking, which is often inconvenient and expensive, especially in semi-urban and rural areas. Small-ticket borrowers are often ignored as it isn’t economically viable to serve them.

Here is how digital banking along sharply rising UPI adoption could help the financial system to grow credit faster:

1. Distribution is vastly improved as digital channels and UPI enable instant, convenient access to financial services across urban and rural areas without the need for costly branches.

2. Underwriting benefits from rich digital transaction data and initiatives such as DPS, allowing banks to better assess creditworthiness, especially for thin-file and new-to-credit borrowers.

3. Collection processes become more efficient with digital repayments and automated reminders integrated through UPI-enabled platforms, reducing defaults and operational costs.

4. Cost of operations for banks lowers as digital onboarding and transactions reduce manual intervention and processing overheads.

This is the role that India’s fintech sector has started to play now, especially post covid. With steady increase in its market share within the retail lending ecosystem, now 8% of all retail consumers actively engaging with fintechs by December 2024. The outstanding balance for FinTech stood at INR 1.3 trillion, showing a 32% year-on-year growth.

Fintech Leading India’s Credit ‘Sachetization’

In age of digitization, fintechs have been able to create a new segment of ‘small ticket personal loan’ (STPL) which most banks don’t find economical to be served.

Fintechs like Navi, Paytm, Mobikwik dominate the small ticket personal loan (ticket size less than INR 100,000) space contributing to 89% of industry originations. Off the total fintech originations, 92% were of small ticket personal loans implying most of their focus has been toward going deeper in this segment.

Fintech lenders attract younger with no major credit history along with rural consumers who often don’t have access to banks in their village, thus promoting financial inclusion with average ticket size of INR 44,000 as of December 2024. The digital-first approach eliminates many traditional bottlenecks like physical paperwork and lengthy approvals, making STPLs highly attractive to customers with immediate liquidity needs. And it is not limited to pushing retail loans, but now 12% of industry originations in business loans in quarter ending December 2024 were by fintechs.

They are steadily trying to increase their share in other lending products such as loans against property, gold loans and home loans as well but have achieved little success yet, with customer loyalty towards FinTech remain low other than for STPL.

In overall scheme of things, credit via fintechs is still in early stages in India, make up only ~1% of the total balances in the industry.

The need of the hour is to reimagine the access, availability, and consumption of credit products in a digital-first context single credit store carrying borrowing power along with the flexibility to avail it in different forms.

Enters CLOU - Credit Line on UPI!

Imagine booking a Vande Bharat train ticket of Rs 1,500 from IRCTC towards end of your month when your salary has already exhausted and you are somehow managing your expenses and desperately waiting for your salary to get credited which is still a few day away?

This is often the plight of many young Indians <30 year who are just starting out their careers, somehow balancing their monthly expense and often end up spending more before next salary day. Now, you might not apply for a high interest bearing personal loan for such small amount, and nor might the bank would immediately issue you a good credit card considering you don’t have any past credit history. This is where Credit Line on UPI (CLOU) enters! Within less than a minute of assessment, your UPI app would facilitate you an interest free credit line of few thousands which you can use for a few days, with payback at beginning of next month.

NPCI in GFF (Global FinTech Fest) in 2023 launched CLOU which allows banks to connect pre-approved credit lines directly to the UPI user base. This translates to easier credit access for individuals and businesses while offering banks access to a much wider audience through the established UPI app ecosystem. It removes most of the friction (and therefore costs) of customer acquisition, onboarding, disbursal and collections.

This innovation democratizes credit by enabling real-time loan access and EMI conversions for everyday purchases like groceries and utility bills, thus extending credit to millions of previously underserved individuals and MSMEs. CLOU’s simplified and transparent credit process reduces costs and fosters responsible borrowing by offering lower interest rates and clear terms compared to traditional credit options.

Imagine buying an entry level smartphone of Rs 10,000 from an offline authorize dealer and while making the payment via your UPI app, you get multiple credit line options from various banks with different payment plans and interest rates! These credit providers were able to instantly access your credit worthiness by accessing your past spending history and were also able to spontaneously define the purpose of the loan. This is the power of UPI.

How Exactly Credit Line On UPI Works?

A credit line provides access to credit to a person using UPI. This eliminates the need for traditional credit cards or paperwork and provides quick access to credit, making credit usage as seamless as a regular bank transfer.

Here’s how it gets enabled:

1. Credit Line Approval: Users apply to a bank for a credit line through their preferred UPI app, which is reviewed and sanctioned based on creditworthiness. The process generally takes few minutes and once approved, this credit facility is linked to the user’s account.

2. UPI Integration: The approved credit line is enabled in the user’s preferred UPI app, similar to adding a bank account. When making a payment, the user selects the credit line as their source of funds, rather than their savings or current account.

3. Usage: The credit line can be used for any UPI merchant transaction. Payments are authorized in real-time using a UPI PIN. Transaction amounts are debited from the credit line, with the merchant receiving funds instantly.

4. Repayment: The user repays the drawn credit amount later, often within a defined billing cycle, either as a lump sum or in installments (EMIs), with interest charged as per the bank’s policy. Repayments are done digitally, again via UPI or other channels.

5. Tracking & Flexibility: Usage, remaining limit, repayment schedule, and history can all be monitored in the UPI or banking app.

Initial Response

When the CLOU was launched formally in September 2023, within a year, most of popular UPI apps in the country had started experimenting with the product through collaborations with banks. Market leader Phonepay entered into the space in Aug’24, and GPAY also has it for its users. Credit focused UPI players like Navi partnered with Karnataka Bank with intent to provide ‘freedom to credit access’ and how people pay without cards through UPI.

[Note: The case of Navi & other players is discussed in the blog, do note - Singularity AMC is not related to any of these companies mentioned directly/indirectly; kindly refer to the sources link]

“Credit line on UPI offering will become the future of credit,”

- Sachin Bansal, MD and CEO, Navi Technologies (Source)

And when it comes to the repayments and credit quality of loans that has been issued via CLOU, while these are still early period, Karnataka bank spoke about it in 2025:

“The entire process(of CLOU) is fully digital, and the product has performed well in terms of portfolio size. More importantly, repayment behavior has been timely, and the portfolio quality has been exemplary.”

- Karnataka bank in Q4 Concall FY25

Maintaining low credit delinquencies and stringent monitoring is crucial for CLOU product line to grow, considering the RBI stance in the past on risks associated with personal unsecured loans.

Regulatory Clarity Flowing In

Indian regulators have always been on a forefront in ensuring India’s digital ecosystem is nurtured well. RBI has advanced India’s digital public infrastructure (DPI) by driving strategy on three foundational pillars: near-universal Aadhaar digital identity coverage for 1.4 billion people, over 500 million Jan Dhan bank accounts expanding financial access for underserved segments, and robust digital connectivity now present across 900 million mobile internet users with rural mobile tele-density reaching 60 percent. This “JAM Trinity” has enabled inclusive access to government payments and services, with over two-thirds of beneficiaries from rural or semi-urban areas and a majority being women, showcasing DPI’s role in bridging the inclusion gap.

By guiding the creation of ubiquitous systems such as INFINET, SFMS, RTGS, NEFT, and retail payments through UPI, RBI has ensured that instant, safe, and affordable payment options reach every section of society, establishing India as a global leader in scalable, interoperable, and secure digital infrastructure.

In case of CLOU, post few of initial pilot, many of the high-street banks did not go live with the feature due to technical challenges & lesser clarity from regulators. As of Aug 2024, Credit on UPI was getting about Rs 10,000 crore in transaction value, but most of it was through the Rupay Credit Cards integrated within UPI and only Rs 100-200 crore comes from the Credit Line on UPI, implying much lower than 1% of total UPI transactions in the nation. The product was off to a slow start since NPCI has not yet defined the interchange fee for this facility.

Later in Aug ‘24, with a circular from NCPI clarified how charges will be levied on the pre-sanctioned credit line on UPI offered by banks, how starting from October 2024. By allowing an interchange charge of 1.2% of the transaction amount for transactions above Rs 2,000, the regulator set the incentive structure in place for players to participate and focus more on product innovation for wider adoption.

Further in July ‘25, NCPI further brought more structure & compliance to how these credit lines are used through UPI through its circular. It stated that from August 31st, 2025, credit lines linked to UPI must be used strictly for the purpose the loan was granted (such as education, healthcare, business, etc.), implying borrowers cannot divert loans to unrelated expenditures, with banks required to monitor and enforce usage based on the stated loan purpose. This provides the required regulatory clarity, letting players/banks to go ahead to go ahead with full launch.

Who gets impacted?

Credit Line on UPI (CLOU) benefits a wide range of stakeholders by making instant, small-ticket credit more accessible for consumers and micro-businesses, improving financial inclusion for those without traditional credit histories. Banks and Small Finance Banks see operational efficiencies, cost savings, and improved customer engagement through data-driven risk assessment and new loan products. Fintechs and UPI apps gain fresh revenue streams and enhanced user engagement via platform-based lending. Merchants benefit from higher sales due to greater customer spending power, while MSMEs enjoy smoother access to working capital through seamless digital credit on UPI platforms. Therefore it eventually becomes a win-win for all the stakeholders part of its ecosystem.

On the other side, customer preference may shift from credit cards to CLOU for everyday small-ticket + big-ticket purchases and bill payments due to simpler processes and direct UPI integration. This could directly impact credit card companies; providers of Point-of-Sale (PoS) terminals for merchants to accept card payments could also get impacted. While the plans to incentivize the players is in place but most merchants who have been using UPI QR code as a mode of receiving payments till now are not used to paying a 1.2 - 1.5% charge on UPI payments similar to how credit card payments are received. Therefore will merchants be open to idea of paying a charge on receipts if the payment is made by CLOU?

Bottom line

UPI’s rise has fundamentally reshaped India’s financial landscape, reaching nearly 500 million users and 65 million merchants, and accounting for 85% of all digital payments in the country now. Its open, seamless, and low-cost architecture has made digital finance an everyday reality - reducing cash dependency, driving financial inclusion, and laying the groundwork for new innovations like Credit Line on UPI. The impact of Digital Payment Scores (DPS) as a tool for lenders to assess the creditworthiness also remains to be seen.

As questions get answered while credit on UPI continues to evolve, it offers a powerful blueprint for democratizing both payments and credit coverage, putting India at the forefront of global digital transformation.

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What This Blog Covers

This analysis explores India’s transformation in defence manufacturing across six key dimensions:

• Strategic imperative driving India’s self-reliance push

• India’s journey in the last decade

• Where India stands today & where it wants to be

• Pathways to Success: How Companies Are Getting There

• Success Stories: Companies That Have Made It

• Global Context: India’s Competitive Advantages

• The Decade of Transformation Ahead

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The Geopolitical Imperative

Picture this: You’re running a business worth $78.7 billion annually, but 70% of your critical supplies come from external vendors who might cut you off at any moment. That vendor in Europe suddenly prioritizes their domestic customer during a crisis. Your supplier from North America gets caught up in their own geopolitical calculations. The partner you’ve relied on for decades turns unreliable precisely when you need them most.

This isn’t a hypothetical scenario – it’s been India’s reality for decades. The Russia-Ukraine conflict crystallized what defense planners had long feared: in times of crisis, every nation prioritizes its own survival above foreign contracts. For India, with its unique security challenges spanning multiple borders and threat vectors, this reality check was both sobering and catalytic.

Economic Stability and Negotiation Power

Defence manufacturing provides more than just military capability – it delivers economic stability and negotiation power on the global stage. When a nation controls its defense production capabilities, it gains:

• Strategic Independence: Freedom from supply chain disruptions during conflicts

• Economic Multiplier Effects: High-value manufacturing that drives innovation across sectors

• Export Revenue: Defense exports create substantial foreign exchange earnings

• Technology Spillovers: Military R&D often drives civilian innovation

• Negotiation Leverage: Domestic capabilities reduce dependence on foreign powers

The government’s commitment to spend $130 billion on modernization over the next 5-7 years, with 75% earmarked for domestic procurement is supported by official budget allocations, isn’t just a policy statement – it’s a strategic imperative wrapped in a massive market opportunity.

India’s Journey in the Last Decade

1. IDEX: The Innovation Catalyst

Perhaps the most transformative development has been the Innovations for Defence Excellence (iDEX) program, which has already signed 430 contracts with startups, ranging from ₹1.5-25 crore. These aren’t just grants – they’re validation from the Indian Armed Forces that specific technologies solve real operational problems.

iDEX represents a fundamental shift from traditional defense procurement to innovation-driven development. By engaging startups and MSMEs directly, the program has:

• Accelerated technology development cycles

• Reduced dependence on large defense contractors

• Created a pipeline of validated defense technologies

• Established proof-of-concept for private sector capabilities

2. Defence Acquisition Policy (DAP): Streamlining Procurement

The Defence Acquisition Policy has undergone multiple iterations to prioritize indigenous manufacturing:

• Make in India categories with mandatory technology transfer requirements

• Simplified procurement procedures for domestic suppliers

• Strategic partnerships to combine foreign expertise with Indian manufacturing

• Buy Indian categories that mandate domestic sourcing for specified equipment

The recently announced Defence Procurement Manual (DPM) 2025 further streamlines the revenue procurement process, covering approximately Rs 1 lakh crore in the current financial year. This complements DAP by addressing operational and maintenance needs, creating additional opportunities for domestic suppliers.

3. Transfer of Technology (TOT): Bridging Capability Gaps

Government has actively encouraged Transfer of Technology (ToT) agreements – a pragmatic approach that combines immediate capability acquisition with long-term indigenous development. ISRO, along with IN-SPACe and NSIL, has executed over 98 TOT agreements till date, demonstrating the model’s effectiveness.

These TOT agreements serve multiple purposes:

• Immediate access to proven technologies

• Gradual capability building in domestic industry

• Risk reduction for private investors

• Foundation for future indigenous innovation

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Where India Stands Today

1. Scale and Growth Metrics

India’s transformation in defense manufacturing over the last decade has been extraordinary:

• Defense production has surged from ₹43,000 crore a decade ago to ₹1.51 lakh crore in FY 2024-25 – a 250% increase

• Exports have grown 35-fold to ₹24,000 crore, reaching over 100 countries, with a stated goal of reaching ₹50,000 crore by 2029

• From being the world’s largest defense importer to an emerging exporter

2. Industry Structure

The defense manufacturing ecosystem now includes:

• 10,000-12,000 MSMEs engaged in defense manufacturing

• Approximately 2,000-3,000 companies with proven technical capabilities and stable cash flows

• Companies typically generating ₹50-500 crore in revenue at healthy 15-25% EBITDA margins

• 509 items on the government’s positive indigenization list providing clear demand visibility

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3. Global Benchmarking

When benchmarked globally, India’s position becomes clearer and also that have a lot more to achieve and at a much shorter time.

• United States: Spends $850+ billion annually with 2,500+ prime contractors

• China: Allocates $471+ billion with state-sponsored manufacturing giants

• India: Currently spends $78.7 billion, representing significant growth opportunity

4. Proven Capabilities

India’s advantage lies in cost innovation: Indian companies are consistently delivering 70-80% of required capabilities at 30-40% of traditional European and North American costs. This isn’t corner-cutting – it’s frugal engineering, the same approach that put an Indian spacecraft into Mars orbit for less than the cost of a Hollywood space movie.

Global aerospace companies have recognized India’s capabilities: A global aerospace manufacturer currently sources $1.25 billion annually from India, leveraging precision engineering capabilities that meet international aerospace standards. Many Indian companies serve as subcontractors to global leaders while simultaneously building domestic capabilities – creating proven track records that reduce investment risk.

Where India Wants to Be – The Vision

1. The $130 Billion Opportunity

The government’s modernization budget provides unprecedented demand visibility for:

• 1.4 million army personnel requiring modern equipment

• 150+ naval ships needing advanced systems

• 800+ aircraft requiring indigenous components and systems

2. India’s Right to Win

India enters defense manufacturing with several structural advantages:

• Cost Innovation: The ability to deliver 70-80% capability at 30-40% cost isn’t just about labor arbitrage – it’s about frugal engineering and systems thinking that originated in India’s space program.

• Software Integration: India’s IT prowess enables leapfrogging traditional hardware-centric approaches. Modern defense systems are increasingly software-defined, playing to India’s strengths.

• Scale Potential: A domestic market requiring comprehensive modernization provides unmatched scale for suppliers to achieve economies of scope.

• Export Credibility: India’s non-aligned positioning makes it an attractive alternative supplier for countries seeking to diversify procurement away from traditional powers. Most countries lack manufacturing capabilities due to insufficient scale (e.g., Israel) or resources (developing nations). They want to work with India as a stable, predictable, and neutral option.

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Pathways to Success: How Companies Are Getting There

Three Strategic Paths to Value Creation

1. The Subsystems/Subcomponent Specialists: Essential but Specialized

   Companies manufacturing critical subsystems occupy perhaps the most attractive niche in defense manufacturing – essential to multiple platforms yet specialized enough to avoid commoditization. E.g. Communication systems can be used across radars, UAVs, aircraft, etc. By virtue of subsystems catering to multiple platforms, they address a larger Total Addressable Market (TAM) and secure themselves from the lumpiness of defense contracts.

   Once qualified, these businesses benefit from sticky customer relationships and often enjoy multi-decade revenue streams with predictable margins. The key is identifying companies with genuine technological capabilities rather than simple assembly operations.

   Furthermore, these companies can evolve from being subcomponent manufacturing companies to eventually building platforms thereby increase their value-add as well as differentiating themselves.

2. System Integrators: Complexity as a Moat

   The high end of the value chain belongs to System Integrators who manufacture large platforms like Control Systems and Avionics and can command 25-35% EBITDA margins while developing sticky customer relationships that span multiple procurement cycles.

   The complexity of modern defense systems favors capable integrators. As platforms become more sophisticated, the value of integration expertise increases. Companies that can successfully deliver high-value complex systems become indispensable to their customers.

3. The Dual-Use Innovators: Best of Both Worlds

   A proven approach to protect business from lumpiness is to have dual-purpose applications for end solutions. An electro-optics payload can be used for ISR (Intelligence, Surveillance, and Reconnaissance) as well as on drones for agriculture, mining, and other enterprise use cases. This ensures optimal capacity utilization and smoother revenue profiles.

   This dual-market approach often leads to faster growth and more attractive exit valuations, as companies can leverage both defense demand and commercial market opportunities.

Success Stories: Companies That Have Made It

1. The Hidden Champions: Beyond the Headlines

While media attention often focuses on large public sector enterprises like HAL and BEL, the real transformation is happening among companies most investors have never heard of. These companies have been delivering complex systems to defense clients. Take Vinyas, an electronic system design and manufacturing company that delivers highly complex, build-to-spec solutions. They combine deep technical expertise with established customer relationships, representing the type of capability that exists throughout India’s defense ecosystem. The opportunity extends beyond manufacturing to other categories like skill development as well. For example, Aimtrex is another company that specializes in offering infrastructure for live training & simulation for the armed and defence forces on an ongoing basis. Goes to prove the opportunity is significant for companies who are focused, differentiated and delivering impact.

2. Scaling Success Stories

With proper capital support and professional management, many companies in the ₹50-500 crore revenue range could scale to ₹1,000+ crore enterprises. The companies that entered this sector five years ago are now scaling rapidly, with many achieving public market valuations that reflect their growth potential.

3. The Consolidation Opportunity

The fragmented nature of India’s defense supplier base presents compelling consolidation opportunities. Unlike consumer sectors where scale often means commoditization, defense manufacturing rewards specialization combined with breadth. This template already exists in global markets, and signs of this are emerging in India as well.

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Global Context: India’s Competitive Advantages

1. Structural Differentiators

India enters defense manufacturing with several advantages that differentiate it from other emerging defense producers:

• Technology Integration Capabilities: Modern defense systems require seamless integration of hardware and software components. India’s proven capabilities in both domains provide a unique advantage in developing next-generation defense platforms.

• Engineering Talent Pool: India’s large pool of skilled engineers, combined with established R&D institutions, provides the human capital necessary for complex defense manufacturing.

• Established Industrial Base: Unlike countries starting from scratch, India has a mature industrial ecosystem that can support complex manufacturing requirements.

• Non-Aligned Position: India’s strategic autonomy makes it an attractive partner for countries seeking to diversify their defense procurement away from traditional powers.

2. Export Market Potential

India’s defense exports have already reached 100+ countries, demonstrating global acceptance of Indian defense products. The combination of cost competitiveness, proven quality, and strategic neutrality positions India well for continued export growth.

The Decade of Transformation Ahead

1. The Historic Inflection Point

India’s defense manufacturing sector stands at a historic inflection point. The convergence of strategic necessity, policy support, and private sector capability creates what may be the most compelling structural opportunity in the Indian economy.

2. The Investment Opportunity

This won’t be a sector that delivers quick wins. Defense manufacturing rewards patience, expertise, and long-term thinking. But for investors who understand both the strategic importance and commercial potential, India’s defense manufacturing revolution offers the opportunity to participate in building the country’s strategic autonomy while generating substantial returns.

The ₹130 billion modernization budget provides unprecedented demand visibility. Structural reforms are reducing traditional barriers. Most importantly, early movers are proving that building globally competitive defense capabilities in India isn’t just possible – it’s highly profitable.

3. The Path Forward

As Operation Sindoor demonstrated, India is ready to defend its interests with indigenous capabilities. Building the ecosystem to sustain such operations independently, while creating globally competitive businesses, represents the real opportunity. It requires commitment, expertise, and patience. But for those who understand the game, the potential rewards justify the effort.

The transformation is underway. The question isn’t whether India will become a major defense manufacturer – it’s which investors and companies will capture the value being created in this historic transition.

This is a long journey, but one that must be travelled, and with a sense of urgency.

The decade ahead will be transformative for India’s defense manufacturing sector. The companies and investors who commit to this journey today will be the ones who define India’s strategic autonomy tomorrow.

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🌑Spain’s Blackout of 2025

On April 28, 2025, a sudden power outage swept across the Iberian Peninsula and left much of Spain and Portugal without electricity. In just five seconds around 12:33 p.m. CEST, about 15 gigawatts of capacity went offline, equal to nearly 60 percent of Spain’s demand. The blackout brought transport, communications, and daily life to a standstill for tens of millions of people.

The blackout lasted for nearly 10 hours and power returned after multiple reliable source of electricity like the Europe’s largest pumped-storage hydroelectric power complex, Cortes-La Muela, located in the Valencia region of Spain came for rescue.

Investigations later confirmed that the blackout was triggered by a combination of voltage surges, weak system planning, and inadequate control capacity rather than a cyberattack. Plants disconnected improperly, and limited backup support from thermal stations made recovery harder. Spain’s limited interconnections with neighboring European systems added to the fragility, turning a local fault into a nationwide crisis. Electricity system had failed after the grid witnessed sharp fluctuations in the network frequency.

As an auto trigger caused due to that fluctuation, the solar power plants were cutoffs from the grid & there was no reliable source of electricity like thermal or nuclear which could act as a backup source of power.

🚀 What’s Inside

We explore the grid and its transmission and distribution (T&D) network. In a world chasing cleaner energy, their role has never been more critical, even if their presence often goes unnoticed.

We break down the most important questions:

1. Rising adoption of Renewable Energy

2. Why renewables require modern grid?

3. How EV transition is putting pressure on our grid?

4. How old is global grid & the impact of AI

5. Why Grid Investment Supercycle Has Begun!

6. Where does India stand and how we plan to upgrade our grid?

7. Is India self reliant? Why Strategic Autonomy is important in T&D space?

Let’s get started!

☀️Rising Adoption of Renewable Energy

Spain has one of the highest % of electricity generated from low-carbon sources in 2024. The largest source of clean electricity is wind (22%), although solar (21%) and nuclear (20%) also have similar shares. Its share of wind and solar has grown very fast in recent years, now over 43%, well is well above the global average (15%).

This is also exactly the reason why during the day the country often witnesses negative prices as the solar power production is at its peak leading to excess supply situation. Therefore, the sharp rise of renewables contribution is starting to impact the economics of the business along impacting something much bigger - stability of its grid.

In recent years, even India has recorded robust number of solar/wind projects coming up. It had the fourth-largest increase in solar generation of any country in 2024 at 20 TWh (+18%), more than the total solar generation of the United Kingdom. This was driven by record capacity additions in 2024, more than double the additions in 2023. India also overtook Germany to become the world’s third largest generator of electricity from wind and solar. (source)

As an impact, India saw its electricity prices dropping to zero for the first time on 25th May 2025. Power was available for free during the day, something which has been very normal in Spain in recent years with rising share of Solar. A mix of cooler weather, unexpected rains, thermal power production and solar generation created a perfect mix of excess supply and subdued demand that day. And it wasn’t a brief anomaly but surprisingly lasted for hours between 9:15 AM and 2:30 PM.

If one also considers the transaction charges on trading electricity, the price was actually negative for a power seller!

Clearly, India’s energy landscape is changing fast and moments like these are just the beginning of what lies ahead.

But with renewable share rising, blackout risks due to grid failure are bound to increase due to supply fluctuations, which can’t be controlled. In case of Spain, the investment in their electricity grid has been much lower compared to the European region on an average investment basis when measured per user or per kilometer. And the outcomes are today in front of the world.

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⚡Why Renewables Require Modern Grid?

As per India’s Power Ministry projections, the country’s installed power capacity is set to grow at a 10% CAGR, rising to 777.1 GW between FY24 to FY30. A significant portion of this growth will be driven by clean energy. Renewables (excluding hydro) are expected to make up 55% of the total capacity, while hydropower will contribute around 7%. Solar will lead the charge, with capacity rising to 300 GW at a strong 22% CAGR, followed by wind, which is expected to grow from to 115 GW at a 13% CAGR.

And India’s energy transformation is unfolding alongside an unprecedented global shift. According to the IEA, global installed renewable capacity is projected to rise from around 3,000 GW in 2024 to over 5,000 GW by 2030. China will continue to lead, with its total capacity expected to grow from 3,438 GW to 4,150 GW, including 1,200 GW of solar and 700 GW of wind. The United States is also set for major expansion, with solar capacity jumping from 128 GW to 340 GW, and wind rising to 200 GW by 2030. In the European Union, solar is forecasted to nearly double to 600 GW, while wind grows from 220 GW to 300 GW.

But renewables like solar and wind are fundamentally different from traditional power sources, they are:

1. Intermittent (solar isn’t available at night)

2. Weather-dependent (less windy = lower wind energy)

3. Often located far from place of consumption

These create unique challenges for grid management. Unlike coal or gas plants that provide steady, controllable output, renewables can fluctuate sharply within minutes, depending on sunlight or wind conditions.

To handle this variability & maintain reliability, the grid must be far more flexible, digitally monitored, and geographically integrated than it was in the past.

A strong modern grid ensures that clean energy can be absorbed, balanced across regions, and dispatched efficiently, without wastage and reduced risks. Simply put, without a smarter, modernized grid, renewables can’t reach their full potential. Under-investment in modernization our grid’s components along increasing focus on renewables, makes us vulnerable to any potential pan-country blackouts.

🚗 How EV Transition is Putting Pressure on Our Grid?

Compared to conventional cars which run on petrol/diesel, electric vehicles (EVs) run on charged up batteries. Charging an EV at home typically increases a household’s electricity consumption by a substantial margin. For example, research from Sweden indicates that adopting a Battery Electric Vehicle (BEV) can raise a household’s hourly electricity consumption by ~20%.

And one of the biggest challenges is the timing and clustering of EV charging. Most drivers tend to plug in their vehicles after returning home in the evening, a period that already coincides with peak residential electricity usage. This can lead to sharp spikes in local demand, risking overloads on neighborhood transformers, substations, and distribution lines, components that were not originally designed for such high, simultaneous loads.

Charging a single EV, such as a Tesla Model 3 or Ford F-150 Lightning, can consume as much or more electricity annually as major household appliances like central air conditioning units or water heaters. For instance, a Ford F-150 Lightning draws over 7,200 kWh per year, far surpassing the energy usage of a large home’s central AC or several refrigerators combined. This concentrated, high-volume demand is not just a matter of increased total consumption; it fundamentally changes the load profile utilities must manage.

Existing electricity grid distribution in India and worldwide was never originally designed to handle such massive, concentrated loads introduced by widespread EV adoption by households. Most of the infrastructure, especially at the medium- and low-voltage distribution levels, was built decades ago to support predictable, relatively stable residential and commercial demand, not the sudden spikes and high power draws associated with home and public EV charging.

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🕰️How Old is Global Grid?

Over the past several decades, global investment in T&D infrastructure has not kept pace with the rapid growth in electricity demand and the evolving needs of modern economies. While there have been periods of significant investment, especially during the post-war boom and the early 2000s, much of the world’s grid infrastructure dates back to the mid-20th century. Most countries prioritized generation capacity and urban electrification, but upgrades to aging grid components often lagged behind. As a result, much of the existing infrastructure was built for the demands and technologies of a different era, with limited foresight into today’s challenges like renewable integration, digitalization, and the electrification of transport.

In Japan, a staggering 64% of the grid infrastructure is more than 20 years old, with only 16% being less than a decade old. The situation is similar in the US and parts of the EU, where over half of the grid is two decades old or more (52% in the US, 50% in the EU). While developing regions like India and China are relatively better place, but a significant portion of the grid is aging, 42% of India’s grid is over 20 years old, while in China, 30% falls into this category, though China notably has a larger share of newer infrastructure (38% less than 10 years old). So in many advanced economies, the backbone of the grid is aging, while emerging economies are gradually modernizing but still contend with legacy components.

Older infrastructure is more prone to outages, less efficient, and often incompatible with modern smart grid solutions. As the world accelerates its energy transition, the need for massive reinvestment in grid modernization is clear, not just to replace outdated equipment, but to build a flexible, resilient, and future-ready power system that can reliably support the next wave of electrification and innovation.

🤖Next Big Driver of Electricity Demand: AI

It is not just the increasing penetration of renewables & electric vehicles (EVs), but also AI servers powered by GPUs that is driving up electricity demand in ways our existing infrastructure wasn’t designed for. As data centers continue to be built across USA & Europe in a big way, we are seeing a surge in power requirements because modern AI workloads require more energy and generate more heat than traditional computing tasks.

The explosive growth of artificial intelligence and cloud computing in the United States is set to increase grid demand by ~50 gigawatts (GW) by 2030, primarily driven by new, energy-intensive data centers required for AI workloads. This rapid surge, projected by major studies from EPRI and Lawrence Berkeley National Laboratory, represents one of the fastest and most concentrated load increases in modern grid history and equates to more than 12% of total national electricity usage by 2028. Such a leap in demand is far outpacing the built-in expansion and resilience of the aging U.S. grid, particularly stressing existing infrastructure in regions like Texas, Northern Virginia, and California.

According to the U.S. Department of Energy's 2025 Grid Reliability report, scenarios that include continued plant retirements and slow replacement of dependable generation can lead to an average annual loss of load hours (LOLH) surging from 8 per year today to over 800 hours per year in stressed regions - a hundredfold jump.

🚀Grid Investment Supercycle Has Begun!

At least $21.4 trillion needs to be invested in the electricity grid by 2050 to support a net-zero trajectory for the world, as per BloombergNEF report. The total investment comprises $4.1 trillion to sustain the existing grid and $17.3 trillion to expand the grid for new electricity consumption and production. World is estimated to have 80 million kilometers in grid growth between 2022-50, more than enough to replace the global electricity grid built till 2022.

Alongside with advancement in AI and ongoing data centers boom, world needs to upgrade multiple components of the electrical systems, implying installing new circuits, heavier-duty wiring, and bigger transformers to safely handle the extra load and prevent outages.

“It was very easy to predict that the next shortage will be voltage step-down transformers. If you've got 100-300 kilovolts coming out of a utility and it's got to step down all the way to six volts, that's a lot of stepping down.”

- Elon Musk (2024)

With this structural pick-up in demand, electrical transformer imports in the developed markets have been gaining steam. Notably, growth started to accelerate post-pandemic, and in 2023, US/EU transformer imports were up >100% vs. pre-2020 levels.

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The level of urgency is high and the wait time to get a grid connection in the USA has reached unprecedented levels, with new energy projects, especially wind, solar, and battery storage, facing average delays of four to five years, and in some regions, up to 7 or even 9 years. As of the end of 2023, there were about 2,600 gigawatts of proposed generation and storage projects stuck in interconnection queues, more than double the country’s current installed capacity. The backlog is so severe that only about 10% of projects in the queue are expected to come online within three years, while around 80% are ultimately withdrawn or canceled due to long waits and rising costs.

This is what happens when your grid is the old and rate of adoption of new technologies is the highest which requires advanced grid components.

In response, the U.S. is undertaking a once-in-a-generation investment supercycle, both from the public and private sectors, to boost and future-proof its grid. Federal initiatives like the Department of Energy’s $10.5 billion Grid Resilience and Innovation Partnerships (GRIP) program are funding critical upgrades, while state and corporate actions are ramping up investments in advanced transmission, substation automation, and digital tools. Deloitte expects total investment needs for the U.S. power sector are projected to reach as much as $1.4 trillion in just this five-year window of 2025-2030.

This level of investment for 2025–2030 is roughly equal to what the U.S. power sector spent over the previous twelve years combined, and similarly high annual expenditure is expected to continue in the following decades as well. For nations exporting grid components and smart grid technologies, such as China, Japan and South Korea, these current bottlenecks in developed word becomes a big opportunity. India must also actively look to participate in this multi-decadal opportunity.

🌏Where Does India Stand Today?

On the electrification parameters in the country, India achieved 100% village by 2018, bringing power to more than 28 million additional households. This universal grid connectivity was accompanied by a sharp reduction in nationwide power shortages, bringing the annual deficit down from 4.2% in 2013–14 to just 0.1% by 2024–25. With robust grid expansion and policy reforms, per capita electricity consumption soared by nearly 46%, also reflecting increased industrial activity across the nation. As of 2025, rural areas now enjoy an average of 20.6 hours of electricity supply daily, while urban regions benefit from even greater reliability at 23.8 hours per day.

When it comes to electricity generation, fossil fuels still account for 78% of generation in 2024, making India’s power sector its largest emissions contributor. But India is one of only ten countries planning to triple renewable generation capacity from 2022 levels by 2030. By October 2024, the country had achieved 200 GW of installed renewables capacity en route to its 2030 goal of 500 GW. This suggests that the country would reach 42% renewable electricity generation by 2030 under current plans.

Out of the targeted 500 GW of renewable capacity by 2030, about 300 GW is expected from solar, and rest from Wind & other sources. At this pace of transition, we shall be at roughly 60% of power capacity from renewables by FY 2032 and will keep India on track for its long-term commitment of achieving net-zero emissions by 2070.

But the issue here is that most of renewable energy sources like solar photovoltaic (PV) panels and battery storage systems generate electricity in direct current (DC) form, while traditional power sources such as thermal (coal, gas), hydropower, and nuclear plants typically generate alternating current (AC) electricity through turbine-based generators. However, the entire power grid and nearly all household or industrial devices are designed to operate on AC, as it transmits efficiently over long distances and is easy to transform between voltage levels.

Because of this fundamental difference, renewables require inverters to convert DC to AC before integration. This is more than a simple conversion - scaling up renewables demands significant investment in advanced inverters, upgraded transformers, and digital grid controls to ensure safe and stable operation. As renewable capacity grows, so does the need for modern AC-DC conversion infrastructure along with long distance transmission as renewables are more efficient in certain parts of the country where investments tend to happen like solar in Gujarat, Rajasthan, and wind in Andhra Pradesh.

Along side, India is witnessing a sharp acceleration in electric vehicle (EV) adoption, with total registered EVs crossing 6.4 million and EV sales representing a record 8% of total auto sales in Q2 2025. Driven by government initiatives, tax incentives, and expanding model choices, the country is rapidly moving toward its ambitious target of 30% EV penetration by 2030.

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As EVs become mainstream, their collective charging habits will shape future grid dynamics. The additional electricity demand from EVs, projected to reach up to 40 TWh annually by 2030 (about 2% of total national demand), may appear modest at a macro level, but the real challenge lies in the timing and location of charging as we discussed above. Without smart management, uncontrolled large-scale charging could strain the distribution network, accelerating the wear on old components and increasing the risk of outages. These all factors make advancements of grid very important.

🔌How India Plans to Upgrade its Grid?

India’s National Electricity Plan (NEP) 2023–32 lays out an ambitious roadmap for grid expansion to meet rising power demand and integrate massive amounts of renewables. The plan targets a 34% increase in transmission lines, from 4.85 lakh cKM in 2024 to 6.48 lakh cKM by 2032, growing at about 4% CAGR.

On the capacity front, the build-out is even more striking. HVDC substations are set to more than double, from 34,000 MVA in 2024 to 64,000 MVA in 2032, an 8% CAGR. Similarly, overall substation capacity will expand from 1,250,000 MVA to 2,400,000 MVA in the same period, also at an 8% CAGR. This expansion includes nine new HVDC transmission systems (33 GW capacity), which will nearly double India’s HVDC transfer capability.

With about ~40% of India’s grid is at least over 20 years old which implies major upgrade requirement is bound to happen.

The plan guides for major spending on grid expansion, renewable integration, transmission upgrades, and technology enhancements, outlining targets for reducing technical losses, improving access, and maintaining energy security in line with India’s broader economic and environmental goals. For the next cycles 2022 to 2032, roughly ₹ 9 Lac crore are expected to spend by the government and government owned entities.

The focus spans new HVDC lines, expanded transmission, upgraded transformers and switchgear, and the rollout of digital solutions like smart meters and substations. Major Indian and international players are active across these segments, making India’s grid expansion one of the most ambitious anywhere - aimed at boosting reliability and preparing for the future of clean energy and digital demand.

But as we continue to invest in our grid, what becomes crucial is whether we are still dependent on other countries for the grid equipment?

🤔Is India self reliant?

In May 2025, whole world was alarmed when US agencies reported how few of the solar inverters that play a critical role in rolling out renewable energy infrastructure, were found to have unexplained communication equipment was found inside some of them. These power inverters used throughout the world to connect solar panels and wind turbines to electricity grids, with China as its biggest manufacturer.

Despite firewalls in place by the utility companies, rogue communication devices which was not listed in product documents where actually found within. This opened the possibility of grid related data transfer to China and could also mean possibility of control access in hands of a foreign nation.

Here in case of India as well, about 80% of its installed solar inverters actually as from China. This led to immediate new guidelines from the government requiring all inverters to be connected to a national software platform managed by a government agency, with data transmission controlled through secure SIM cards.

Now this is only one instance.

India has developed strong self-reliance in key sectors of the power grid, particularly in distribution infrastructure and mid-level grid equipment. A robust domestic manufacturing ecosystem supported by government initiatives like “Make in India” enables the production of distribution lines, transformers for medium voltages, and most substation components locally. This has helped India meet much of its growing demand for grid expansion and modernization with homegrown technology.

But when it comes to more critical and technologically advanced areas - such as ultra-high voltage (UHV) equipment, large-capacity power transformers, and cutting-edge digital grid technologies - India remains dependent on imports and foreign collaborations. Here is more details on this:

• High-voltage and ultra-high-voltage transformers (400 kV and above) are often supplied by major global firms headquartered in Germany, Japan, Switzerland, and the US such as Hitachi Energy, Siemens, ABB, and GE. These companies leverage their global engineering and testing capabilities, with key manufacturing done outside India due to the technical complexity and scale required.

• HVDC equipment and FACTS (Flexible AC Transmission System) devices, essential for long-distance, high-capacity transmission and renewable integration, remain primarily supplied by these global leaders with advanced manufacturing facilities outside India.

• Digital grid controls, relays, and smart automation systems are increasingly critical but often imported or depend on foreign partnerships, reflecting the concentration of semiconductor and advanced electronics capabilities abroad.

• Inverters for grid-scale solar and energy storage - such as GE Vernova’s FLEX inverter - are manufactured largely in the US, highlighting import reliance for utility-scale renewable integration technologies.

And because modernization of electricity grids is not just an Indian challenge, but a global megatrend - this opens up a huge opportunity for exporting ‘Made in India’ equipment to the world.

The Indian arm of GE Vernova that operates multiple factories in India has increased its focus on exports. Their Vadodara plant produces 765 kV class transformers and shunt reactors, Chennai facility manufactures HVDC and FACTS components, and its Pune site assembles wind turbine components for international projects. They widened their portfolio and have witnessed huge export demand concentrated in regions undergoing grid modernization and renewable integration, especially Europe, Asia, and the Middle East.

“First, the Europe opened and then Australia and then now even Middle East is also opening up. So yes, definitely the TAM for the export potential is also growing.”

- Sandeep Zanzaria, CEO & MD, GE Vernova India (source)

India, with its growing domestic ecosystem, is well placed to capture a share of this multi-decade export opportunity. Global companies like Siemens, Hitachi Energy, and ABB are already using their Indian manufacturing hubs for advanced grid technologies. This opens a huge white space for domestic companies to step up and take a lead by capturing this global opportunity.

🤝Backbone that Completes Energy Transition

The story of the energy transition is often told through the lens of solar panels, wind farms, and electric cars. But without transmission, these technologies cannot deliver on their promise. The grid is the quiet enabler that carries renewable power from distant deserts and windy coasts to our cities, balances fluctuations in supply, and ensures that new demand from EVs and data centers does not tip the system into crisis.

In many ways, investing in generation without modernizing transmission is like building engines without roads. A resilient, smart, and future-ready grid is the true foundation of clean growth. For India, achieving strategic autonomy in T&D is not just about energy security, it is about capturing a global export opportunity and shaping the future of power systems worldwide. The energy transition will only be complete when the backbone that supports it, our grid, is strengthened for the decades ahead.

At Singularity, we are committed to advancing India’s grid independence by ensuring the nation controls its energy destiny in technology, security, and economic opportunity.

If this vision resonates with you, consider sharing this blog in your circles and join the conversation in the comments below. Together, we can build a grid that powers not just today’s India, but the India of tomorrow.

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Imagine stepping into a car with no driver on the steering wheel, all-electric vehicle that navigates city streets on its own. This isn’t science fiction; it’s the daily reality for riders of Waymo’s autonomous fleet of cabs in cities like San Francisco, Los Angeles, Phoenix and more. These cars have already completed over 10 million rides in the US, and are doubling every few months in 2025. As of May, these cars have surpassed Lyft to become the 2nd-largest on-road trip provider in the Silicon Valley.

But these look very different from a normal EVs. These are Jaguar I-PACE model cars equipped with an array of 29 high-resolution cameras, 5 lidar sensors, and 6 radar units, which helps them deliver precise 360-degree perception for safe, fully autonomous driving. They contain server-grade GPUs to process real-time data, fusing high-resolution maps with live sensor input, identifying objects and road users, predicting their behavior, and planning safe driving actions - all within milliseconds to fully autonomous operation and ensuring Waymo comes out as the safest autonomous cab present in the market.

And with initial success, Waymo is now launching in many more cities in the US, and also going global by launching in Tokyo where they got the approvals. Estimates from Morgan Stanley suggests that the number of Waymo cars could go up 15X in the next 5 years, for which the company has also partnered with Hyundai to produce all-electric IONIQ 5 SUV cars for them.

Additionally back in 2017, Singularity had also invested in Wayve - a market leader in autonomous driving in UK, which later got funding from Microsoft, Nvidia & Softbank. They also partnered with Uber to drive autonomous taxis in UK.

🚀 What’s Inside

We break down the most important pointers:

1. How need for on-device compute puts strain on a battery?

2. Why lithium-ion batteries are at the heart of electric revolution along boosting adoption of renewables?

3. What exactly goes inside lithium-ion batteries?

4. Where does India stand & how can we achieve Strategic Autonomy?

5. How Singularity is making a difference & insights from Summit 2025.

6. Emerging technologies & the impact of it.

Let’s get started!

🔋 Compute Puts Strain on Your Battery!

In order to power such high accuracy computing, Waymo cars tend to have relatively larger than usual batteries. For example, currently used Jaguar I-PACE model cars are powered by a large 90-kWh liquid-cooled lithium-ion battery in them, which is relatively bigger than most standard EVs like Tesla Model 3 which comes with capacities ranging from 60-kWh to 75-kWh battery.

While no specific details have been shared by Waymo’s team about how much additional power is required to ensure highest level of real time accuracy, few studies performed till now have found that an autonomous car is expected to consume 10%–15% more power in city driving over a normal EV car driving which could also potentially go up to 30% as well, for ensuring highest safety controls are held up. Infact, a study by MIT researchers reported that autonomous vehicle like these, if adopted widely, could consume combined energy that generate total emissions much more than countries like Argentina and even Canada, just because of their computational need.

One key aspect to understand here is the difference between on-device & off-device compute. When ChatGPT or Perplexity search is performed by a user on a smartphone, it has a negligible impact on the user’s own device power consumption as the computational load is handled ‘off-device’ in massive data center located far away. This doesn't really put a strain your mobile the battery of that smartphone.

However, what we see in case of an autonomous vehicle, is actually an example of on-device processing - where inference and computation happens directly on a given device and this has the potential to put stain on the battery because of additional computational needs. While this enhances speed, privacy, and offline functionality, but battery constraint becoming a bottleneck is a real possibility, which could be impacting companies like Apple as well.

Back in October 2024 when Apple launched its most awaited ‘Apple Intelligence’, many users reported a noticeable increase in battery drain, especially when actively used or during initial setup after an update. Infact, battery issues arose even when Apple had not even launched many of its promised new features. And majority of the computationally-heavy AI features only worked because Apple’s online services division had fortuitously conceived a cloud server project that could handle anything the phone couldn’t implying many AI capabilities were shifted from ‘on-device’ processing to ‘off-device’ processing. This could have been one of the reasons which potentially led to delay in the launch of AI powered Siri.

All in all, batteries play a very critical role, and our lives are increasingly becoming dependent on them. As technology progresses, they have constantly evolved & continue to advance at a fast pace. Now, let’s understand batteries in a detailed way - exploring the fundamental reasons behind their rising importance, and why strategic autonomy is the need of the hour for India.

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Batteries: The Heart of Electric Revolution 🚗

They have long powered everything from inverters to mobile phones till now. The most commonly used in pre-covid time ‘Lead-Acid batteries’ became a cheap and reliable source for storage of power for starter batteries in cars and UPS systems, and multiple more use cases. But because they were too heavy and not suitable for long-range EVs, the actual eureka moment was waiting for evolution to take place in batteries.

And then came Lithium-ion batteries that changed our prospective forever. Since their commercial debut in the 1990s, they become the backbone of all portable electronics and electric vehicles (EVs). Known for their lightweight design and high energy density, they outclass older battery types like lead-acid or nickel-based alternatives be a huge margin. Among the various Li-ion chemistries, NMC and LFP have emerged as the front-runners.

• NMC (Nickel-Manganese-Cobalt) batteries are prized for their high energy density. Ideal for applications where space and weight are at a premium like smartphones, laptops, and lightweight EVs. However, cobalt comes with its own set of problems: it’s costly, faces supply chain constraints, and often involves ethically questionable mining practices. And reducing cobalt content, the battery start to overheat often, and in rare cases, even explode.

• LFP (Lithium Iron Phosphate) batteries offer a different set of advantages. They forgo nickel and cobalt entirely, and therefore are cheaper, safer, and more stable under thermal stress. The trade-off has historically been lower energy density, resulting in larger and heavier battery packs. But innovation is quickly changing that. Today’s LFP batteries are closing the performance gap with NMC, while remaining about 30% more cost-effective per kWh. That’s why LFP now powers nearly half of all new EVs sold globally. (Source: IEA)

The impact of this advancement has been clearly visible on EV penetration across geographies which continues to move away from combustion engine cars that uses petrol, with aim of a cleaner environment. Regions like Europe and China are expected to reach 60% to 80% EV penetration by 2030!

And on the other hand, while India has been slow compared to the developed economies and China in adoption of EVs, we are catching up fast. About ~20% of our cars, ~40% of 2-wheelers and ~50% of 3-wheeler are expected to be EVs by 2030 as the below slide shows:

That’s not all. Along with helping in faster EV transition, latest batteries also helps us meet our renewable goals sooner.

Powering Our Shift to Renewables♻️

While ~75% demand for these advanced batteries is driven by EVs, there is another important use case that advancement in batteries unlocked is the ability to store the renewable source of energy which is generally produced from a renewable source like solar and wind that are inherently intermittent -

“Solar power is so obviously the future for anyone who can do elementary math”

- Elon Musk, Tesla (June 2025)

Solar panels only produce power when the sun shines, and wind turbines only spin when the wind blows. But electricity demand doesn’t follow the weather. To ensure a reliable 24/7 power supply from renewables, we need a way to store excess energy and deploy it when needed. And that’s where grid-scale battery systems, also known as Battery Energy Storage Systems (BESS), come into play.

These systems absorb surplus electricity when generation is high - typically during sunny or windy periods - and release it later, especially during evening peaks or lulls in renewable output. Beyond storage, BESS also plays a key role in stabilizing the grid, responding instantly to fluctuations and helping maintain frequency and voltage balance.

Roughly ~20% of total advanced battery demand is driven by BESS shown above which is crucial for global renewable transition.

Rate of Transition is Accelerating📈

A battery is the single largest cost component in most electric vehicles, typically accounting for 30–40% of the total value of an EV making it a ‘make or break’ part of a vehicle and for the whole EV industry. With advancement of technology and raw material remaining in oversupply zone for last few years, the lithium-ion batteries have become much more effective & efficient over time - making an EV much more suitable for end consumer. Back in 2010, battery packs cost over $1,100 per kWh. In 2025, that’s come down to around $130 per kWh, a nearly 90% reduction over 15 years. Goldman Sachs expects them to plummet further, to $80 per kWh by 2026, unlocking full cost parity with ICE vehicles in many markets

Therefore, the average car price difference of an EV car with that of an conventional cars in developed markets like Germany and USA is just in the range of 20% to 30% in 2025. In fact in countries like Thailand the prices are at par already, with Chinese imported cars even more cheaper than the conventional car powered by fossil fuel.

Falling prices coupled with government incentive in certain countries to adopt EV continuing, has led to a boom in overall sales worldwide as shown in the graph below.

EV launches in India in 2025 are set to surpass petrol and diesel cars. Out of 28 vehicle launches planned for the year, 18 are electric, according to a report by The Economic Times.

🔍But What Exactly Goes Inside Lithium-ion Batteries?

Any battery is made up of several key components, each playing a crucial role in how the battery stores and releases energy. But at its core, there are 2 key components of a battery, taking example of a lithium-ion battery:

• Cathode (Positive Electrode): These are usually made from lithium metal oxides such as lithium iron phosphate (LFP), or lithium nickel manganese cobalt oxide (NMC). The cathode is responsible for supplying lithium ions during battery operation and its material largely determines the battery’s energy density, voltage, and cost.

• Anode (Negative Electrode): Most commonly composed of graphite, the anode stores lithium ions when the battery is charged and releases them during discharge.

So both Cathode & Anode are basically made up of critical minerals which are mined from earth, refined and then sent to factories where their chemistries are prepared which go inside. We also have a ‘battery management system’ which acts as the brain of a battery for its optimal usage, along with more metal components, electricals in place that play their crucial role.

A typical EV contains 6 times more mineral content by weight than a petrol or diesel car. While ICE vehicles rely mainly on steel, aluminum, and small amounts of copper, EVs depend heavily on lithium, nickel, cobalt, graphite, and rare earths to power their batteries and electric drivetrains. For instance, an EV battery alone can contain 50 to 80 kg of copper, 30 to 40 kg of nickel, 10 to 20 kg of manganese, 8 kg of lithium and 50 to 70 kg of Graphite, compared to just a few kilograms of copper and manganese in a conventional vehicle.

Today as of 2024, the EV penetration stands at 20% of total cars sold globally. And for every 1% increase in global electric vehicle (EV) car penetration, the demand for these key minerals would rise by thousands of tons.

As the EV car sales rose by over 25% in 2024, the most critical mineral in this transition, Lithium, saw its demand expanding by 30% year-on-year. While its demand has already tripled since 2020, it is actually expected to see another tripling over the next decade with EV sector accounting for 90% of this additional demand. Similarly, for Graphite which goes along Lithium in a battery, is actually the most heaviest mineral by weight in a typical EV or energy storage battery today, is expected to remain as most common material for all lithium-ion battery chemistries.

International Energy Agency also expects the global investment in battery storage (BESS) to triple by 2030, which would further give a leg up to demand for minerals that go into lithium-ion batteries.

🌏 Where does India stand?

India’s battery supply chain remains heavily dependent on imports for part of supply chain - from raw materials like Lithium, Nickel, Cobalt to chemical production of their useful chemistries to construction of Cathode/Anode and also finished cells! In fact in FY24, over 84% of India’s lithium-ion battery imports came from China and Hong Kong, and the our domestic manufacturing is still largely limited to final stage low-value assembly and packaging, with most high-value cell components and manufacturing equipment sourced from abroad.

Situation is similar in case of Graphite which used as Anode in a Lithium-ion battery and is produced from needle coke (form of carbon).

This is were Strategic Autonomy comes into picture. As India’s clean energy and electric mobility ambitions accelerate, achieving battery autonomy is no longer just a technological aspiration - it is a strategic necessity. Especially as we are fast moving towards an autonomous future where batteries requirement could grow exponentially, relying heavily on imports for everything that goes inside it, exposes our country to global price volatility, supply disruptions, and geopolitical risks, all of which can undermine energy security and economic growth.

“India has 6% of global critical mineral reserve, but less than 0.5% of global output - We don’t know how to use it”

- Rajat Verma, Founder & CEO, Lohum at Singularity Summit 2025

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Strategic Autonomy🛡️: Need to Act today!

As we move to become ‘Aatmanirbhar Bharat’, we can’t let our self be dependent on import of all our battery requirements. Our annual sales of EV units sold in our country is set to quadruple by 2030 compared to 2024, and our renewable capacity is set to touch 500 GW - we must gain leadership in what is at the heart of this transition, the Batteries!

While China doesn’t own many minerals, it actually ‘controls’ up to 70% of global rare-earths mining, 85% of refining capacity and about 90% of rare-earths metal alloy and magnet production. And in June 2025, as China flexed its muscle a bit by curbing exports of these rare earth magnets, the global auto companies came in a 'in full panic' as they feared their factories could come in a grinding halt.

Similarly, tomorrow if China decides to stop the exports of batteries to India, our transition goals set for 2030 would become a distant dream.

🌐 Where to Begin with? Think Diplomacy

Lithium reserves which are at the heart of this transition are concentrated in Australia, Chile and China which combined have over 75% of reserves, and India lacks here. Similar is the case for many more materials.

Diplomacy plays a pivotal role in securing access to critical minerals, which are essential for batteries, renewable energy technologies, and advanced manufacturing. The country should look to forge bilateral and multilateral agreements, invest in overseas mining assets, and participate in global initiatives to diversify and de-risk its supply chains. Effective mineral diplomacy not only reduces vulnerability to supply disruptions and price volatility but also strengthens national security and supports long-term industrial and clean energy ambitions.

“We don’t have many resources in our country (Japan), so we do rely a lot on diplomacy and our trade partners”

- Saburo Nakao, CLO, Panasonic Energy at Singularity Summit 2025

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Boosting Domestic Refining🏭

While we may not own reserves for most key minerals - real issue remains that we hardly have any refining capacity in our country. On other hand where China also lacks most key mineral reserves and therefore has much smaller level mining activity - it dominates the midstream and downstream part of supply chain.

Beginning in the 1980s and accelerating through the 1990s, China identified mineral refining as a sector of national strategic importance and backed it with subsidies, low-cost loans, and lax environmental regulations, enabling its companies to undercut global competitors who faced stricter standards and higher costs, allowing them to monopolize the midstream and downstream segments - refining, processing, and manufacturing, where the true economic and strategic value lies. The portion of red bars in middle and right part of chart below tells you all.

India must work on ensuring we have enough refining capacity to process the raw material so that we could fulfil our domestic demand and not be dependent on import of final produce from China. In Jan 2025, Government of India did approve ‘National Critical Minerals Mission’ with outlay of ₹34,300 crore in 7 years with similar aim.

And one might think India would take decades worth of concentrated effort to reach the level of low cost refining that happens in China (which is indeed true), but there are some low hanging fruits as well like Graphite where the landed price of final processed output produced in India doesn’t really differ when the same is manufactured in India as per our analysis after talking to industry experts suggests.

At Singularity, we have the privileged of investing in HEG Ltd which is into Graphite (Anode) and Lohum which is into lithium-ion battery recycling (Cathode). We believe strategic autonomy in battery components is the need of the hour and we want to lead this from the front.

As the world gets older & AI starts impacting our physical world - there is fast shift towards autonomous future. We are currently seeing the rise driverless cars and it won’t be a day far enough where we would have our own personal robots doing work for us.

🤖Autonomous Future = More Batteries?

OpenAI’s CEO, Sam Altman, said in an interview that people are underestimating the potential impact of humanoid robots. While we haven’t had that pivotal moment yet, but he doesn’t think it’s far away.

“Everything that moves will be robotics someday and it will be soon”

- Jensen Huang, Nvidia

A Tesla Optimus Robot, their flagship humanoid robot has 2.3 kwh lithium-ion in battery and the company plans to produce 500,000 robots in 2027. A typical two-wheeler EV also has a similar kwh battery in it and the cost of robots is drastically falling globally.

Citi Group also expects there could a rapid increase in energy demand of AI models integrated into robots, and without significant advancements in battery technology, the gap between energy supply and demand will continue to widen, potentially limiting the capabilities of AI-powered robots. They also expect we would have over 600 million humanoid robots by 2050.

So there could be whole host of new autonomous devices which depend on real time on-device coming up which the global demand estimates for battery critical minerals might not have incorporated yet.

⚠️Technology Risk

One key factor that makes investors nervous while investing in this space is the level of disruption could happen in chemistries of minerals. For example, while demand from lithium-ion batteries triples from 1.8 Mt to over 6 Mt by 2035, IEA expects starting from 2030, rising silicon content in battery anodes could reduce the share of ‘Graphite’ gradually from the EV sector.

Similarly, one of main Chinese battery manufacturers, CATL, have announced mass production of sodium-ion batteries for EVs and energy storage, which reduces the dependence on Lithium and doesn’t require expensive metals like cobalt or nickel. While we are yet to see how the adoption of such batteries in real world takes place, it becomes crucial for all manufactures & investors to keep track of such developments.

This is precisely why India must act now. In a world where battery technologies are rapidly evolving and mineral dependencies are shifting, India cannot afford to be a passive observer or a late adopter. Whether it’s lithium today or sodium tomorrow, the race is not just about securing raw materials, but about controlling the full value chain, from refining to cell manufacturing to end-of-life recycling.

Achieving strategic autonomy in batteries will not only shield us from global supply chain disruptions and price shocks but also strengthen our position in the emerging green economy. With our ambitious goals of 500 GW renewable capacity and millions of EVs by 2030, batteries are no longer just a component - they are a national imperative. Investing in this space today ensures that India isn't just buying the future - it is building it.

Therefore, we at Singularity are fully committed to accelerate India’s autonomy in this space. If you find this blog valuable, share it in your community & let us know your thoughts in comments below.

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The reality is more complex:

• Low average incomes but high expectations for quality and personalization

• Regional fragmentation creating micro-markets

• Hyper-competition with ideas quickly copied

• Rapidly evolving tastes fueled by social media

These dynamics make it rare for consumer companies to achieve long-term, profitable growth. The question every investor faces is:
How do you identify the companies that can defy the odds and become enduring brands?

Learning from CaratLane

Our own journey with CaratLane gave us a ringside view. CaratLane broke even at ₹715 crores in revenue, serving around 3.5 lakh customers. An important realization was that growth only truly accelerates when free cash is available. You cannot grow endlessly by burning capital.

From CaratLane and from studying similar companies, we distilled three cornerstones for building long-term winners in Indian consumer markets:

1. Profitability - The Non-Negotiable Anchor

• Look at profitability and growth together, not as trade-offs

• Never lose sight of the customer’s wallet size. CaratLane kept the average selling price flat even when gold prices rose

• Focus on share of wallet, or what more the same customer can buy, instead of just “lifetime value”

• Maintain inventory discipline to keep margins healthy

Categories that can survive profitably at scale are often what we call “disruption proof,” where human interaction remains central, as in jewelry retail.

2. Growth - But the Right Kind

Not all growth is created equal. We prefer:

• Categories that are “10-minute delivery proof,” meaning not easily commoditized by speed-based disruption

• Sunrise industries with strong secular tailwinds

• Premium customer segments with resilient demand, even in downturns, as with jewelry during COVID

3. Execution - The Silent Differentiator

Execution may be the least glamorous part of the story, but it is the glue that holds everything together:

• Strong inherent gross margins in the category

• Ability to keep marketing cost low at scale

• A business model that delivers operating leverage as you grow

• Embracing the theory of marginal gains: tiny, continuous improvements across every function

Execution is where an operator’s mindset meets an investor’s discipline.

Akshayakalpa - Building a Durable Consumer Moat

A powerful illustration of our investing principles is Akshayakalpa, a smaller investment in our portfolio but a standout example of entrepreneurial execution. The founder has built not just a business, but a robust and hard-to-replicate supply chain, creating a true moat in the Indian dairy landscape.

Akshayakalpa stands apart for several reasons:

• The company has built a complex supply chain that gives it defensible advantages and protects it from competitors.

• The product is superior and positioned in the premium segment, which allows Akshayakalpa to charge prices that are 25% higher than the market average. This translates into higher gross margins and greater sustainability.

• By focusing on the premium segment, Akshayakalpa benefits from resilient demand. Customers in this segment value quality and traceability, making the business less vulnerable to downturns.

• The dairy category offers high customer retention, meaning brand loyalty is strong and marketing costs remain low as customers continue to purchase.

As Akshayakalpa expanded into new states, the business achieved clear operating leverage. This success reflects both the attractive category dynamics in dairy and the meticulous execution demonstrated by the founder. The combination of product leadership and operational rigor aligns perfectly with our investment approach, which rests on profitability, quality growth, and disciplined execution.

Investor + Operator = Singularity Lens

At Singularity, our process is shaped by the “tug” between the investor brain, which focuses on unit economics and capital efficiency, and the operator brain, which understands what it takes to execute in the trenches.

We prefer to be slow, deliberate investors, aligning deeply with founders who share these principles before writing a cheque.

💡 Summary of Our Consumer Investing Principles

• Profitability: Growth with discipline, not at the cost of sustainability

• Growth Quality: Choose categories with intrinsic resilience and long-term demand

• Execution Rigor: Combine investor metrics with operator excellence

This playbook is the foundation of how we evaluate brands today in our Consumer vertical at Singularity AMC. It is also why we believe the next generation of Indian consumer brands will be born in categories where these three principles intersect.

The shift away from fossil fuels is no longer a matter of ‘if’ but ‘how fast’. Energy transition is now a global economic race, with over $2 trillion being deployed annually across renewables, storage, electrification and more. India, one of the largest and fastest-growing energy markets, has a clear choice: remain dependent on global supply chains, or lead the clean energy ecosystem from the front.

At Singularity AMC, our conviction is clear. Building India’s energy autonomy is not just about reducing emissions or lowering the import bill. It is about creating long-term national competitiveness in technologies that will define the next several decades.

India’s Solar Push: A Clear Win So Far

One area where India has already shown leadership has been renewables, especially solar. Over the past five years, the sector has scaled meaningfully both in terms of capacity addition and upstream manufacturing. Our portfolio company Waaree Energies' revenue has grown 100x+ in 13 years, from 110Cr in FY11 to 11400 in FY24, driven by both export opportunities and domestic demand. With supportive policies like ALMM and PM Surya Ghar schemes, India is now actively building out the entire solar manufacturing stack, backward integrating from modules assembly to cells to wafers / polysilicon.

This upstream momentum is matched by downstream adoption. India’s total installed solar capacity is now among the top five globally. Solar is expected to remain the backbone of our renewable energy target of 500 GW by 2030.

Transmission: The Quiet Backbone of Renewable Transition

While solar grabs headlines, it is India’s expanding transmission and distribution infrastructure that enables clean energy to reach where it's needed. Companies like Power Grid Corp have been expanding grid capacity and government plans a Rs 9.12 lakh crore investment by 2032 under the National Electricity Plan.

The importance of Transmission & Distribution will only grow as more renewable power is added. Managing intermittency, integrating battery storage and building flexible, smart grids will be critical. Without this backbone, generation potential cannot be fully realized.

Batteries: The Next Strategic Priority

As India continues to do well in solar and T&D, batteries are where the next big leap must happen. Batteries today power not only EVs but also enable grid stability, autonomous tech, and large-scale energy storage. These are all essential for a clean energy future.

Globally, battery manufacturing and supply chains are becoming the new oil. But in India, nearly everything from raw minerals to finished battery cells is still largely imported. Most of India’s lithium-ion battery imports came from China, which controls 85% of world’s refining capacity of rare earth. Most domestic players remain focused on low-value stages like final assembly.

What Needs to Be Built

There is a lot of discussion around gigafactories. But batteries are more than just cell assembly. The real value lies in upstream components such as cathodes, anodes and electrolyte chemistries. All of these depend on critical minerals like lithium, cobalt, nickel and graphite.

This is where strategic autonomy comes in. Even if we lack large reserves of certain minerals, India must build refining and processing capabilities. China gained its edge not by owning minerals, but by dominating refining and midstream manufacturing.

India can start with areas where we already have a cost edge. Graphite is one such opportunity. Our portfolio company HEG Ltd produces anode materials such as graphite, and Lohum specializes in battery recycling and cathode materials like lithium, both representing promising investment avenues for domestic and international capital.

Why This Matters Today and The Path Ahead

The world is entering an era of energy-intensive autonomy. Driverless cars, AI-powered robots and smart devices that work offline are all on the rise. Each of these demands batteries that are efficient and locally available. Current global forecasts may be underestimating how much battery capacity and mineral supply will be needed when autonomy meets mobility and AI.

India must not remain just a consumer of this future. We need to build the capacity to shape and supply it. Battery components, especially midstream processing and refining, must be treated as national priorities. The Union Cabinet’s approval of the ₹34,000 crore National Critical Minerals Mission is a strong step in that direction.

Private capital has a central role. At Singularity AMC, we are backing founders building real capability across the battery value chain - from mineral recovery to component manufacturing to recycling and more. Our focus is not on chasing trends, but on building foundational infrastructure.

India’s energy independence story will be defined not just by gigawatts, but by gigafactories and grams of refined materials.

Building a Long-Term Investment Institution

Founded in 2016 with backing from industry veteran Madhu Kela, Singularity AMC was envisioned as a long-term investment institution, not a transaction-led dealmaker. The goal: build a durable platform that compounds value over decades.

Rather than follow the typical PE playbook, we began by directly engaging with large investors and family offices, understanding gaps in their portfolios, and creating solutions to bridge those gaps. This led to the development of two core execution strategies:

• Private Growth

• PIPEs (Private Investment in Public Equity)

Together, these strategies help us back high-quality businesses across both private and listed markets.

Combining Operator and Investor Thinking

The name “Singularity” reflects our mindset. We are a continuous pool of capital and capability. Our approach combines the discipline of an investor with the insight of an operator. This helps us go beyond financials and into the heart of what drives business growth, team strength, and execution quality.

We partner closely with founders and aim to create value over the long term.

Our Operating Network: The Singularity Plus Platform

We have built a deep expert network that founders can tap into during their scale-up journey. Leaders like Mithun Sacheti, Avnish Anand, Arun Mittal, and Ajay Kumar bring hands-on experience from scaling businesses across sectors.

This forms our Singularity Plus Platform. It is a curated group of specialists, operators, and advisors who have been in the trenches and can help solve real-world challenges across consumer, financials, and manufacturing domains.

What Sets Singularity AMC Apart

Three principles define our investing approach:

1. Research-led investing
   We do not chase deals. Every investment is backed by deep research and conviction.

2. Intellectual honesty
   We debate every decision on merit, grounded in logic and clarity.

3. Diligence-first process
   We conduct rigorous business, financial, and legal diligence before investing.

We are comfortable taking some execution and scale-up risk, but protect capital using five key guardrails:

• Disciplined entry valuation

• Sector diversification within the fund

• Full-scope diligence before deployment

• In-house capabilities to help portfolio companies navigate challenges

• Limited exposure to consistently loss-making companies

Sector Focus, Boutique Agility

Though focused and selective by design, Singularity AMC invests across a diversified set of high-conviction sectors that reflect India’s structural growth opportunities.

Our core investment focus includes:

• Energy Transition

• Financial Sector

• Consumer Focused

• Industrials

We look for businesses with strong fundamentals, large addressable markets, and the ability to scale sustainably.

We currently manage capital on behalf of more than 60 family offices and 8 institutions, with full transparency and alignment.

Exits Are Planned From Day One

Every investment begins with a clear exit plan. We believe liquidity should be intentional, not reactive. At a portfolio level, we construct around long-term value creation with defined timelines and growth expectations.

Our PIPE strategy also allows us to stay with high-quality companies even after they go public, supporting their growth over longer timeframes.

Our Long-Term Goal

Singularity AMC remains focused, founder-friendly, and outcome-driven. Our aim is to build a timeless investment platform known for deep thinking, operational insight, and long-term alignment with investors.

If we can consistently compound goodwill alongside capital and create a distinct style of investing that reflects who we are, we will consider that success.

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