Semiconductor chips manufacturer Polymatech Electronics is looking to achieve a $2.5 billion (around Rs 20,000 crore) revenue by FY26 on the back of its increased production capacity, the company’s chief executive officer and managing director Eswara Rao Nandam told FE in an interaction.

Demand for energy-efficient lighting solutions such as LEDs (light-emitting diodes) across sectors like automobile, consumer electronics, infrastructure, etc, and pick up in semiconductor solutions for medical applications, and horticulture, are among key factors, on which Polymatech is banking to grow its topline.

As on date, the company has an order book of Rs 7,000 crore (all exports), which it plans to execute in the next two years. In FY24, the company’s revenue grew 85% year-on-year to Rs 1,200 crore, and net profit rose 64% to Rs 275 crore.

“Today we have 2 billion chips capacity, with the new machinery (to manufacture ingots and wafer fabrication), we will having 10 billion chips capacity this year itself,” Nandam said.

According to Nandam, 10 billion chip capacity with a 50-60% efficiency by next year, will lead to production of 5-6 billion chips. Factoring in a revenue of $0.5-0.6 per chip with manufacturing of high-end products, it will take the company to a $2.5 billion topline by March 2026, he explained.

Polymatech is into opto-semiconductor and compound semiconductor space. This type of semiconductor chip segment includes devices that can emit, detect, or control light, and this broadly leads to power efficiency in electronics devices and faster data transmission.

The company has been doing packaging of chips till now and supplying it for end-user applications. From this year, it will get into ingot manufacturing and wafer fabrication. Ingot is the semiconductor material for producing wafers. The wafers then undergo further processing steps, and used for making final chips. To get started, the company will make Sapphire ingots, which are key for manufacturing LEDs.

“We will be a fully integrated fab to floor company by next year.  We will also fabricate silicon and silicon carbide wafers, so that whoever comes to India, we will be able to supply wafers to them,” Nandam said.

The company is also scouting a 45 acre land for setting up wafer fabrication unit and is in talks with many state governments for that. At present, it has two plants in Tamil Nadu.

Polymatech is looking to raise Rs 1,500 crore through an inital public offering (IPO), for which it is expected to re-file its draft red herring prospectus with the Securities and Exchange Board of India (Sebi).

Sebi returned the earlier offer documents as it has observed the book running lead managers were holding shares in the company and that was not disclosed by them. So this time we will be filing the prospectus with Bank of Baroda and Axis Bank with new financials,” Nandam said.

The fresh proceeds from the IPO will be used by the company to purchase machinery. Till 2023, the company has planned a capital exenditure of $5 billion (around Rs 40,000 crore). “Out of that $1 billion will be completing by end of 2025,” Nandam said.

Even as Polymatech will make India as its manufacturing hub for wafers and chips, it will be opening assembly and packaging units worldwide to serve the end-users applications as all of its revenue comes from exports to markets such as Middle East, UK and the US.

In this financial year, the company is also looking to target Rs 1,000 crore revenue by offering its solutions for medical applications, starting with hospitals in Tamil Nadu.

Polymatech is also looking to apply for incentives under the semiconductor incentive scheme of the government.