Invest in India’s Chip Boom: Mutual Funds for Semiconductor Growth
By Business Desk
Explore mutual funds offering indirect investment in India’s rapidly expanding semiconductor industry, fueled by government initiatives and ambitious growth targets.
India’s semiconductor industry is entering a significant growth phase, driven by ambitious government programs. This expansion creates opportunities for investors to gain indirect exposure through specialized mutual funds focusing on allied sectors.
The Semicon India Programme 2.0 specifically aims to cultivate a robust domestic chip manufacturing ecosystem. This initiative covers chip design, advanced packaging, equipment, and research, with 12 projects approved and three facilities already in commercial production. India targets a US$200 billion domestic semiconductor market by 2035.
Funds Tapping into India’s Chip Ambition
The Canara Robeco Infrastructure Fund provides one such avenue, primarily investing in India’s infrastructure sector. As of June 2026, its Assets Under Management (AUM) stood at Rs 9,980.7 million, with a Standard Deviation of 19.85 and a Sharpe Ratio of 0.84.
This fund maintains a substantial 67.20% allocation to large-cap stocks. Its portfolio diversified across electrical equipment at 14.26%, power at 10.84%, and construction at 10.05%. Key holdings include Larsen & Toubro Ltd and CG Power and Industrial Solutions Ltd, both crucial to the broader technology supply chain. The fund did lag its benchmark, the BSE India Infrastructure TRI, over three and five-year periods.
Another option is the Motilal Oswal Flexi Cap Fund, an open-ended equity scheme investing across market capitalizations. Operating under a ‘Buy Right: Sit Tight’ philosophy, its AUM reached Rs 132,944.2 million by June 2026, reporting a Standard Deviation of 17.1% and a Sharpe Ratio of 1.
The fund’s concentrated portfolio of approximately 32 companies shows significant allocations to electrical equipment at 17.9%, consumer durables at 9.1%, and IT software at 7.8%. Holdings like CG Power and Industrial Solutions Ltd. offer exposure to the electronics manufacturing ecosystem. It outperformed its benchmark, the Nifty 500 TRI, over three years and since inception, despite a negative return in the last year.
The HDFC Defence Fund offers a sectoral focus on defense and allied industries, another segment benefiting from semiconductor advancements. As of May 2026, its AUM was Rs 97,242.7 million, with a higher Standard Deviation of 31.697% reflecting its specialized nature.
Nearly half of this fund’s portfolio, 49.0%, is allocated to large-cap companies. It holds substantial exposure to capital goods at 60.60% and automobile & auto components at 21.60%. Top holdings include Bharat Electronics Ltd., Bharat Forge Ltd., and Hindustan Aeronautics Limited, all contributing to defense electronics and precision manufacturing.
These mutual funds offer investors a strategic way to participate in India’s expanding semiconductor narrative. Their diversified holdings and sectoral focus provide indirect exposure to the long-term opportunities generated by the domestic chip manufacturing drive.