Speaking with Mint, Anand Dubey, chief executive of Indkal Technologies, said that the company is close to finalizing its upcoming funding round, and before this it will also make its first product announcement as a design-led electronics manufacturing firm.
“We’re currently in talks with marquee investors, including those with electronics-focused funds, to raise our next round of funding. We have multiple term sheets under consideration, with a little more than $100 million available for us to tap. Our existing investors will also be a part of the next funding round, and we are looking to close the round within the next two to three months,” Dubey said.
Design-led manufacturing firms typically earn higher margins from their efforts to manufacture consumer electronics devices in comparison with pure-play contract manufacturers. While the latter simply execute device assembling and primarily earn by building massive scale, design-led manufacturers such as Indkal license brands and trademarks, and apply their product designs to these brands.
The design-led manufacturing route helps generate larger margins and more localization of an electronics device in the country—and it could move India one step closer to generating more local value. Notable examples of brands present in India through a design-led manufacturing route include German legacy audio brand Sennheiser, and Taiwanese electronics firm Acer—the latter being Indkal’s client in India.
Expanding into smartphones
“We are looking to build scale in the consumer electronics segment, starting with smartphones. To do this, we’re beginning with the launch of the first Acer-branded smartphone with a new high-performance chipset in India on 15 April,” Dubey said.
The funding round will be the largest capital raised by electronics manufacturing services (EMS) firms in India this year, where technology firms have gone through significant course correction in the equity markets after a buoyant 2024. Two persons close to the company said that the large funding quantum could help Indkal Technologies build scale—and also prove that the design-led manufacturing model may work.
Challenges and future prospects
“Typically, a design-led manufacturing model has not worked because when a brand is successful, it wants to closely control all of its products—and not leave its designs in the hands of a third party. Most brands maintain certain reference designs, but the end result in outsourced designing of electronics devices have typically not been very successful so far. For Indkal, taking the Acer brand closer to the current top-five of the domestic smartphone market will be a steep challenge,” said a senior executive with direct knowledge of the matter.
Industry trends
Mint reported in February this year that India’s smartphone market is worth just over $40 billion—with the US’ Apple Inc and Korea’s Samsung Electronics reaping nearly half of the industry’s revenue. The rest of the industry is ruled by incumbents from China, including Xiaomi and BBK Electronics’ sub-brands Oppo, Vivo and Realme.
Currently in decline, the domestic smartphone market has lately underwhelmed brands and investors alike, as weak consumer sentiment stalled sales. While easy availability of financing led to some growth in the industry’s overall revenue, India’s smartphone market—which is Indkal’s key target—has remained below pandemic levels.
“We’re predicting yet another year of single-digit growth in both volume and revenue. While the average pricing per device could marginally grow, the ‘premiumization’ curve is likely to flatline gradually. In such a market, it might take time for a new brand like Acer to make a mark,” said Navkendar Singh, associate vice-president at International Data Corporation (IDC) India.
Notably, Finnish design-led manufacturer HMD Global Oy brought the once-iconic mobile phone brand Nokia back to life by licensing it in 2017. However, despite multiple efforts, Nokia’s sales never took off—leaving it with a negligible market share in India and worldwide. China’s Lenovo Group’s marketing of fellow iconic brand, the US-born Motorola, is a solitary exception of an electronics brand that has held its own even in a licensing format.
However, Motorola continues to operate as a separate company, which is not quite the same as Indkal’s brand licensing deal with Acer.
Analyst expectations
Nevertheless, analysts believe that Indkal’s launch efforts could have some impact. “Unlike Nokia, which was down and out, a number of new brands have done well. ‘Nothing’ is going steady, Poco and iQoo have also done reasonably well. Acer is a currently active brand in India—it ranks among the top three brands in India in both laptop and tablet sales. This means that it is not entirely out of the consumer mindshare—there could be some effect of this that may be seen upon launch. Instant sales volumes may not be within expectations, and the brand licensing approach suggests Acer is playing it safe while looking to try out the India smartphone market. It may take a while for Acer to rake up volumes in terms of smartphone sales, but it remains to be seen if the company might have the appetite to stay in the cutthroat Indian market for three years or more,” Singh said.
The upcoming funding round, coupled with the launch of Acer-branded phones, will eventually lead to a public listing for the company in the near future, at least two executives told Mint. “The domestic equity market has typically been kind to EMS firms such as Dixon, Kaynes and Amber—by end-2026, Indkal may join the fray, too,” the second executive said.
Dubey, however, neither confirmed nor denied talks of a public listing at the moment.
“The public equity market has been weak this year. Plus, Indkal’s success will depend on its ability to build scale in the domestic electronics market in India. Much of these factors will be at play, before the firm should approach the public market,” the first executive added.
Indkal Technologies had yet to file its FY24 annual financial report with the Registrar of Companies. In a previous conversation with Mint last year, Dubey said that Indkal’s FY24 revenue crossed ₹1,000 crore and was on track to scale up to ₹3,000 crore in annual revenue by the end of this fiscal.
