VVDN Technologies to invest $100-200 mn in PCB fab, components facilities

VVDN president Vivek Bansal said in an interaction with Mint that the new facility will supply components across its lines of business which includes 5G telecom radio equipment, IoT, automotive, industrial use cameras, EV chargers and upcoming businesses of data centre servers, laptops, smartphones, and smart meters.

“Our topmost focus is to reduce dependence on imports. Given the government push to do things locally and our captive requirement is massive today, where we’re bringing in millions of PCBs on monthly basis, so definitely, we have to set up our own PCB fab. In our backward integration road map, we are looking to do camera lens manufacturing, display manufacturing, connectors and other components, in India," Bansal said, adding that the new capacities will come up in Polachi, Coimbatore where 100 acres has been earmarked for this purpose.

Integrated facilities in Coimbatore

The Polachi plant will also house the company’s 5G smartphone manufacturing facility, he added, which will be functional by the next financial year. Discussions with smartphone brands for volumes were ongoing.

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The first phase of the plant in 500,000 sq. ft. area is expected to be off ground in January 2025, while the entire facility will be built in additional phases. The plant will include manufacturing of automotive and telecom equipment, and the location will be used to supply to its client base in South India as well as for exports to US, Europe, Japan, Korea and Middle East.

As a contract manufacturer, VVDN competes with the likes of Dixon Technologies, even as its largest revenue share comes from its original design offerings to brands. It exports EV chargers to the US, security surveillance cameras, 5G radio access network equipment, and IoT products.

“More than half of our capacity is meant for exports, but we also need to ramp up our domestic supplies because local demand is increasing rapidly," Bansal said. It is increasing capacities of EV chargers in Manesar, which are largely exported to the US. The manufacturing of smart meters is expected to begin by the year end.

Plan for facilities in US or Mexico

With a $1-billion contract from HPE for making data centre servers in India, the company is looking to set up additional capacities in US or Mexico, depending on the policies of the new government which is looking at increasing local manufacturing.

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“We already have one facility in the US. There is a large trend around Build-America, Buy-America, so we will have to do something. A lot of our customers have already started to ask for local manufacturing, so we’re definitely looking to do something in the short term," Bansal said.

VVDN will fund the expansion from internal accruals, he added, with the company witnessing revenue growth of 50% on-year in FY25, and partially from funding raised by investors. Applied Ventures, LLC, the venture capital arm of Applied Materials, Inc recently invested an undisclosed amount in the company to expand the R&D of next-generation semiconductor technologies as well as electronic products and solutions. 

Last year, Kotak Special Situations Fund (KSSF) and Kotak Pre-IPO Opportunities Fund (KPIOF) picked up stake through secondary shares and subscription to compulsorily convertible debentures. Motilal Oswal Alternate Investment Advisors Private Ltd have invested a total of ₹850 crore since 2020 in the company.

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Bansal said that the company was exploring an eventual public listing in India but was yet to make any concrete plans on the timing.