Growing opportunities in the Indian Space Sector!

Industrial Update – Newsletter – January 2024

IMAP’s Industrials group brings you this monthly update with a focus on latest news, transactions and interesting snippets from the Industrials domain in India

Growing opportunities in the Indian Space Sector!

The Indian space economy is estimated to be US$10 bn p.a. (globally US$550 p.a.), with rising participation from private players. The sector has seen significant shifts off late due to two main developments:

a. Increased launches by the Indian Space Research Organization (ISRO) with a focus on indigenization leading to several Indian service providers and component suppliers evolving from being Tier2/Tier 3 suppliers to providers of more value-added services

b. Increasing number of startups in space-techover 250+ startups in both downstream and upstream segments that have cumulatively raised funding of over US$250 million The regulatory environment has also become more conducive – while the sector was liberalized in 1990s with enabling Satellite communication and Remote Sensing Data Policies subsequently, it has only been more recently that we have seen the sector open up – the establishment of NSIL (commercial arm of ISRO) in 2019 and IN-SPACe (to simplify clearances for private space technology companies) in 2020 the National Geospatial Policy in 2022 and the Indian Space Policy 2023.

The increase in the number of space missions, advent of small satellites (which now form ~90% of ISRO’s launches), push to ‘Make in India’ and regulatory support has resulted in the evolution of the traditional components suppliers.

In the Indian spacetech sector, sensing the great market opportunity and taking global cues, there has been a proliferation of companies across Upstream (Satellite hardware) and Downstream (Earth Observation and Communication). Some of the primary target audiences for these startups include Govt. space agencies and industries in telecommunications, aerospace, earth observation, R&D institutions, defense, private space travel, logistics, mining and  energy sector. We also saw the first launch of satellite by private player Pixxel in Apr’22 and the launch of rocket into space by Skyroot in Nov’22

Select players in space sector – Suppliers and Startups

Some recent transactions

Jan’24DCX SystemsSBI General and JP Morgan invested ~₹500 Cr. in the cable & wire harness business
Jan’24Country DelightThe dairy product producer raised ~₹166 Cr. in a Series-E fundraise led by Temasek
Jan’24Clean Max EnergySansera Engineering acquired a 26% stake in the clean energy provider for ~₹20 Cr.
Jan’24Acro PaintsJK Paints acquired a 20% stake in the  paint manufacturer for ~₹53 Cr.
Jan’24Ascent CircuitsAmber through ILJIN Electronics acquired 60% stake in the PCB manufacturer
Jan’24Blu Smart MobilityThe EV ride hailing platform raised ₹208 Cr. in a round led by Responsibility Investments

Recent News

  • China’s economy grew 5.2% in 2023, the recovery has been shaky with a deepening property crisis and increasing deflationary risks with drop in demand; USA grew by 2.5% in 2023 , highest among G7
  • China overtook Japan as the world’s biggest vehicle exporter in CY 2023, shipping 4.91 million vehicles compared to Japan’s 4.42 million; also Microsoft (Mcap ~$2.95 Tn.) overtook Apple ( Mcap ~$2.85 Tn.) in market cap to become the worlds most valuable company
  • India’s manufacturing PMI grew to 56.5 in Jan’24 from 54.9 in Dec’23, the strongest growth since Sep’23; a value above 50 indicates growth
  • To make smartphone exports more competitive, GOI slashed import duty rate for several mobile phone components from 15% to 10%
  • To reduce reliance on imports of natural gas and with a target to gasify 100 MT of coal by 2030 , the Union Cabinet approved  a ₹8,500 crore viability gap funding for coal gasification projects

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