India’s semiconductor push, backed by rising investments in artificial intelligence (AI), electric vehicles (EVs), 5G networks and electronics manufacturing, is drawing fresh attention from mutual fund investors.
While India still has limited direct exposure to listed semiconductor companies, several diversified equity funds are emerging as indirect beneficiaries of the country’s growing chip ecosystem, according to an analysis by Equitymaster.
Also Read: India Set to Activate Four Semiconductor Plants by December, Says Ashwini Vaishnaw
Why Semiconductor-Linked Mutual Funds are in Focus?
India aims to build a US$ 200 billion (bn) domestic semiconductor market by 2035. Industries such as electronics manufacturing, defence, electrical equipment & industrial engineering are expected to benefit from this long-term structural opportunity.
The global semiconductor industry has become central to the digital economy, powering everything from smartphones and cloud computing to data centres and autonomous technologies.
India’s own semiconductor mission and expanding manufacturing base are expected to create opportunities across infrastructure, engineering, telecom and industrial manufacturing.
Instead of investing in individual chipmakers, three mutual funds can offer meaningful exposure to businesses likely to benefit from the semiconductor value chain. The selection was based on factors including rolling five-year compound annual growth rate (CAGR), portfolio allocation and fund management.
Also Read: Delhi Bets on Chip Design Over Fab Plants in New Semiconductor Push
Three Funds Making the Watchlist
- Canara Rob Infrastructure Fund: The first is Canara Rob Infrastructure Fund, which has delivered a five-year rolling CAGR of 32.27%. The fund invests heavily in capital goods, power and infrastructure companies that could benefit from India’s expanding semiconductor manufacturing ecosystem.
- HSBC Infrastructure Fund: The second is HSBC Infrastructure Fund, positioned to gain from the country’s long-term infrastructure build-out, including investments supporting chip fabrication, industrial parks and electronics manufacturing.
- Motilal Oswal Flexi Cap Fund: The last on the list is Motilal Oswal Flexi Cap Fund, which offers broader market exposure while maintaining investments in sectors expected to benefit from rising semiconductor demand over the long term.
The report noted that semiconductor manufacturing depends on strong infrastructure, including power systems, logistics, engineering and industrial facilities. As India ramps up investments under its semiconductor programme, companies operating across these segments could see sustained demand.
However, the publication has further cautioned investors to assess market risks & investors must acknowledge their financial goals & risk appetite before making any investment decisions.
India’s semiconductor ambitions are creating opportunities beyond chip manufacturing alone. For investors, the broader ecosystem, including infrastructure, engineering and industrial businesses, may remain an area to watch as the country’s electronics manufacturing story continues to evolve.
Samarjit Kaur is a journalist and communications professional covering technology & emerging digital trends. With a focus on clarity and context, she reports on developments shaping industries and governance. When not reporting, she chooses to plug-in and relax on her playlists and plan her next bucket-list trips!
