The Indian semiconductor market stood at ₹4.5 lakh crore in 2024 and is expected to surpass ₹8.9 lakh crore by 2030. The growth estimate is based on India’s Semiconductor Mission (ISM), approved in December 2021, which rolled out ₹76,000 crore to provide financial support to companies involved in the fabrication, designing, and manufacturing of chips.
The first major development under ISM was in June 2023, when the government approved US-based memory chip maker Micron Technology to set up an around ₹22,514 crore Assembly, Testing, Marking, and Packaging (ATMP) facility in Sanand, Gujarat. Soon after this, the government approved ten more projects to scale its chip production capacity.
For example, it recently approved SiCSem Private Limited’s proposal to set up a plant in Bhubaneswar that will produce 60,000 wafers per year. Another major approval was granted to the HCL-Foxconn JV to set up a plant in Jewar, Uttar Pradesh, which will have a capacity of 20,000 wafers per month.
Now, from the investors’ point of view, three semiconductor ancillary companies, or, to be more precise, hidden gems worth tracking after the Micron deal, are discussed below.
Kaynes Technology: From Integrated Manufacturing to an OSAT Powerhouse
With over 30 years of experience, Kaynes Technology offers end-to-end integrated electronic manufacturing. Its product lineup includes process engineering, conceptual design, life cycle support, and integrated manufacturing, which are used in aerospace, automotive, defence, information technology, the Internet of Things, medical, and railways.
When it comes to semiconductors, the company, through its subsidiary, Kaynes Semicon, is setting up a ₹3,300 crore Outsourced Semiconductor Assembly and Test (OSAT) facility and an HDI bare-board manufacturing unit at Sanand, Gujarat. The pilot product line for assembling, testing, and packaging of semiconductor chips began in June this year. The total daily capacity of this facility will be 60 lakh chips.
A few months back, the company signed a five-year agreement with Alpha & Omega Semiconductor (AOS). As per the agreement, 60% of the first-phase production will be utilised by AOS. In the second phase of its expansion, which involves an investment of around ₹1,800 crores, the company will manufacture more complex chips. To expand globally, Kaynes is already exploring deals with Broadcom, Infineon, Qualcomm, STMicroelectronics, and Intel to provide OSAT services.
Beyond semiconductors, Kaynes Technology’s subsidiary, Kaynes Circuits India, has recently signed a deal with the Tamil Nadu Government to set up a greenfield project. The recent 100% acquisition of its subsidiary, Kaynes Space Technology, aimed at designing and manufacturing satellites and mission-specific payloads, has given it an edge from an investor’s point of view.
Moving to the financials, Kaynes Technology has recently declared its quarter one results for the financial year 2026. It posted a profit before tax (PBT) of ₹96 crore, which saw a 49.9% growth on a year-on-year (YoY) basis. With an operating profit of ₹113 crores, the operating profit margin stood at 17%.
The order book also surged to ₹7,401 crore, which is a 46.9% YoY increase. However, one thing investors looking for regular income must factor in is that, despite constantly reporting profits, the company is not paying dividends. The return on equity (ROE) of 11.5% over the span of three years is also something investors must not overlook.
Kaynes Technology India Limited 5-Year Financial Performance
| Particulars | FY21 | FY22 | FY23 | FY24 | FY25 |
| Sales (₹ in crores) | 421 | 706 | 1,126 | 1,805 | 2,722 |
| Operating Profit (₹ in crores) | 42 | 95 | 170 | 257 | 411 |
| Net Profit (₹ in crores) | 10 | 42 | 95 | 183 | 293 |
| EPS (₹) | 14.3 | 9.0 | 16.4 | 28.7 | 45.8 |
Kaynes Technology’s success in the long term depends on how it innovates its miniaturised components, advanced PCB designs, and embedded systems. The success also relies on how it scales its operation without compromising quality or margins.
The stock price of Kaynes Technology trades at a Price to Earnings (P/E) multiple of 129x, as compared to the sector median of just 37x.
CG Power: An Industrial Giant’s Pivot into High-Tech Chips
With 86 years in business and reach in 80 international markets, CG Power and Industrial Solutions provides end-to-end engineering solutions that cater to Logistics (railways), Energy (power), and Industrial (manufacturing). The company has nine manufacturing plants across India. It is part of the Murugappa Group of companies.
In March 2024, the company, in a joint venture with Renesas Electronic Corporation from Japan and Stars Microelectronics (Thailand) Public Company, proposed to invest ₹7,600 crore over five years to set up an OSAT facility at Sanand, Gujarat. The facility will have a chip production capacity of 1.5 crore per day. In the joint venture, CG accounts for a 92.3% stake, while Renesas holds 6.8% and Stars Microelectronics 0.9%.
The facility will be responsible for manufacturing legacy packages such as Quad Flat No-lead (QFN) and Quad Flat Package (QFP), as well as advanced packages like Flip Chip Chip Scale Package (FC CSP) and Flip Chip Ball Grid Array (FC BGA). For those unaware of these terms, QFN serves as a compact IC for consumer electronics, wearables, and industrial control systems.
QFP is used in microcontrollers and signal processors in the automotive and telecom sectors. FC CSP is utilised in high-performance mobile processors, 5G baseband chips, and compact IoT devices, while FC BGA is used in high-speed computing, automotive ECUs, AI accelerators, and telecom infrastructure.
To support CG’s mission to revolutionise the semiconductor industry, the India Semiconductor Mission (ISM) under the Ministry of Electronics and Information Technology has approved a subsidy grant of ₹3,501 crore for capex support.
Besides CG Power’s growth in the semiconductor domain, the company has recently received the allotment of 45.13 acres of land for setting up a greenfield transformer plant with a 45,000 megavolt-ampere (MVA) capacity in Jahangirpura, Sehore, Madhya Pradesh. The MP Industrial Development Corporation has handed over the land for a 99-year lease period. A few months ago, to expand its business, CG Power received regulatory approval to acquire the radio frequency component business of Renesas Electronics America Inc. and other affiliated businesses of Renesas Electronics Corporation.
In the first quarter of the financial year 2026, the company posted a consolidated net profit of ₹267 crore, which is a 10.8% increase on a YoY basis. The revenue surged to ₹2,878 crore compared to ₹2,228 crore in the same quarter of the previous financial year. Talking about the segment-wise revenue breakup, the power systems segment posted ₹1,070.1 crore, the industrial systems segment reported ₹1,691.5 crore, the semiconductors segment, being a new addition, posted ₹108.5 crore, and the other segment fetched a revenue of ₹8.5 crore.
CG Power and Industrial Solutions Limited 5-Year Financial Performance
| Particulars | FY21 | FY22 | FY23 | FY24 | FY25 |
| Sales (₹ in crores) | 2,964 | 5,484 | 6,973 | 8,046 | 9,909 |
| Operating Profit (₹ in crores) | 116 | 647 | 1,005 | 1,142 | 1,319 |
| Net Profit (₹ in crores) | 1,280 | 913 | 963 | 183 | 1,428 |
| EPS (₹) | 9.7 | 6.3 | 6.3 | 9.3 | 6.4 |
CG Power’s future success will rely on its ability to integrate innovation with execution. By aligning with India’s infrastructure push, global supply chain shifts, and sustainability imperatives, CG is not just preparing for the future; it is shaping it.
The stock price of CG Power trades at a Price to Earnings (P/E) multiple of 105x, as compared to the sector median of just 46x.
VA Tech Wabag: The Unconventional Bet on the Semiconductor Thirst for Pure Water
Where Water Meets Innovation’ defines VA Tech Wabag. The company is in the business of desalination, wastewater treatment, effluent treatment, sludge treatment, water reclamation, and more. With over 100 years of experience, a presence in 25-plus countries, and more than 125 intellectual property rights, the company is a leader in its segment.
When it comes to semiconductors, the company provides Ultra Pure Water (UPW) required in chip fabrication. UPW is thousands of times purer than drinking water and is free from minerals, organic compounds, bacteria, and particles. Semiconductor manufacturers use UPW in rinsing, cleaning, and etching silicon wafers during multiple stages of chip production. Although VA Tech Wabag currently does not have any direct clients in the semiconductor sector, the company is actively exploring opportunities not only in semiconductors but also in the green hydrogen space.
Wabag’s Dahej plant’s proximity to Sanand and its logistical manageability for industrial supply chains, especially for water-intensive infrastructure, also make it a possible supplier for Micron and other semiconductor facilities in the Gujarat region.
Progressing in other segments, Wabag recently bagged a ₹380 crore order from the Bangalore Water Supply and Sewerage Board (BWSSB). The agreement requires the company to design, engineer, construct, and commission wastewater treatment plants. Each plant will have solar sludge drying beds, a biogas generation facility, and a tertiary treatment facility. The company has also recently received a ₹2,332 crore order from Saudi Arabia for a desalination project.
Not to skip a ₹360 crore project for the design, build, and operation (DBO) of Gail’s petrochemical complex in Uttar Pradesh.
In terms of financials, Wabag has posted a sales figure of ₹734 crore, which is a 17.2% increase from ₹626 crore in the same quarter of the previous year. The net profit stood at ₹66 crore in the June quarter of the current financial year, up by 20% on a YoY basis.
VA Tech Wabag Limited 5-Year Financial Performance
| Particulars | FY21 | FY22 | FY23 | FY24 | FY25 |
| Sales (₹ in crores) | 2,834 | 2,979 | 2,960 | 2,856 | 3,294 |
| Operating Profit (₹ in crores) | 219 | 234 | 318 | 366 | 422 |
| Net Profit (₹ in crores) | 101 | 132 | 11 | 250 | 295 |
| EPS (₹) | 17.7 | 21.2 | 2.1 | 39.5 | 47.5 |
In the coming years, the success of Wabag depends on strategic and various macroeconomic factors. The company also has core competencies to support the government’s AMRUT and Jal Jeevan Mission to improve rural tap water access. However, for sustainable growth, the company has to manage the risks associated with time and cost overruns, especially in international projects.
The stock price of Wabag trades at a Price to Earnings (P/E) multiple of 32.2x, as compared to the sector median of just 26x.
The Verdict: Separating Hype from Reality in India’s Chip Race
Global semiconductor dynamics are undergoing a structural shift, and India is uniquely positioned to capitalise. The ongoing US-China tech standoff, coupled with rising geopolitical risks in Taiwan, is pushing global chipmakers to diversify supply chains. India’s policy push under the ISM, backed by incentives, aligns perfectly with this global ‘China+1’ strategy. The proposed 100% US tariff on imported semiconductors, which many see as a US-centric move, but in reality, for India, it is a strategic opening disguised as a disruption.
Disclaimer
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
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Rishabh Sinha is a seasoned financial content creator with over 10 years of experience in BFSI domain. His portfolio spans over 20 of India’s most trusted financial brands. Rishabh brings depth, structure, and a reader-first approach to every piece he crafts.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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