The Abu Dhabi Global Market is similar to the Dubai International Financial Centre, which domiciles a large number of funds, asset management companies and investment banks. DIFC has a large presence of Indian companies and banks. Abu Dhabi has of late been aggressively promoting its Global Market, encouraging institutions to work under its jurisdiction and working with issuers to domicile their offerings on the exchange.

ADGM and the Confederation of Indian Industry (CII) had last year entered into a Memorandum of Understanding to jointly collaborate on initiatives that could bolster business opportunities between India and the UAE. Recently, ADGM signed an MoU with Yes Bank to foster cross-border exchange between the FinTech ecosystems of the UAE and India. The collaboration was meant to enable FinTech innovators from the Middle East region and India to work with ADGM’s Regulatory Laboratory so as to have the opportunity to expand into each other’s markets

The new Abu Dhabi fund for India is raised by Orbit Ventures (NOVF ESDM), the newly launched Abu Dhabi-based fund company founded by Indian businessman Ajay Jalan under the juridiction of the Abu Dhabi Global Markets. According to fund officials, while $1.5 billion will be raised from the Gulf region as feeder fund by NOVF ESDM, the remaining $500 million has already been secured from a consortium of investors involving both the Indian government and ultra high networth individuals.

During the past year, NOVF signed MoUs with leading technology providers UMC (Taiwan), AMD (US), TowerJazz (US) and Centrotherm PV (Germany) as technology licensees for its fab projects, fund officials say. The proposal for the planned fab projects was submitted to the Indian government in August this year and the fund is in advance discussions for an ‘in principle approval’, according to Jalan. Discussions are also on with the Andhra Pradesh and Gujarat governments to secure the land for the project. According to Jalan, unlike a standalone fab investment, NOVF-II’s focus is to develop end-to-end value chain in a 2,000-acre cluster, creating a thriving ecosystem of supporting investments.

The project aims to build the required infrastructure to cater to India’s fast-growing market for electronic goods and components. India imported nearly $45 billion worth of electronic goods and components in 2016, according to a study by Ernst & Young and Indian Electronics & Semiconductor Association. By 2022, India’s demand for electronics is estimated to touch $400 billion on the back of rapid penetration of electronic devices and internet connectivity.

“China is now building its semiconductors capacity after producing 80 percent of world electronics. In contrast India is not even able to produce 15 per cent of its own requirement. Domestic high-value addition manufacturing of electronics and semiconductors in India is virtually non-existent,” says Jalan, emphasizing the rationale behind the government of India’s urgency in building the crucial ecosystem.

For the past decade, the Government of India has been trying its best to attract investments and promote the semiconductor sector to reduce the risk of trade imbalance and cybersecurity. It introduced its first policy towards semiconductors in 2006 and Jalan was involved with the drafting of the policy.

As a consulting CFO for a semiconductor start-up, Jalan had even raised an investment of $1 billion and started constructing the fab. However, this effort lost steam due to the Lehmann Crisis in 2008.

“A semiconductor fab is an extremely complex project and is dependent on three critical factors: capital, technology, and government support. NOVF has secured all three critical factors and is fast moving towards execution,” says Sanjiv Taneja, Chairman, Advisory Board, at NOVF II. Having worked with AT&T Bell Labs, Cadence and Alcatel-Lucent, Taneja brings years of experience into the team.

“Electronics and semiconductor companies and start-ups have created immense value over the past few years. India is the next big market, with an emerging untapped talent,” he points out.

Company officials describe the initiative as the beginning of a new era of FDI into India. According to them, the feeder fund to India is aimed at creating an additional layer of trust to the local and regional investors by ensuring total transparency and creating confidence among them. (IPA Service)