Tessolve, a semiconductor design company based in Bengaluru, is considering an initial public offering (IPO) within the next three to four years, according to co-founder and CEO Srini Chinamilli. He mentioned that while the company is not preparing for a public listing immediately, an IPO is definitely on the horizon.
Chinamilli did not disclose how many shares might be offered or how much money the company hopes to raise. Tessolve is looking to gather funds for acquisitions and growth, and it has attracted interest from global private equity firms eager to invest.
“We’re in discussions now, but we haven’t made a final decision. We’re a high-growth, cash-flow positive company, but to speed up our growth and make more acquisitions, we might need to raise more funds,” he explained, adding that the next fundraising effort would be significantly larger than the last.
Tessolve previously raised $40 million from Singapore-based Novo Tellus Capital Partners at a $100 million valuation in 2021. The funds were used for acquisitions and expansion. The company is also exploring more buyouts, including one in Europe that is nearing completion, although details were not disclosed.
As part of the Hero Group, Tessolve designs, tests, and produces semiconductor chips for 80% of the world’s 20 largest semiconductor companies across 10 countries. The company is expanding its global operations, having recently opened labs in the US, Singapore, and India, with plans to set up centers in smaller cities across various states.
Chinamilli noted that while their market has largely been international, recent initiatives in India have opened new opportunities. The company aims to expand its presence both in India and abroad and is working on establishing labs for advanced manufacturing and technology.
A key focus for Tessolve is to set up centers in second-tier cities in India. The company has successfully trained over 5,000 engineers in collaboration with universities to develop local talent. Tessolve has already tripled the size of its Bengaluru center and is in talks with several state governments to establish more centers.
Having achieved ₹1,000 crore in revenue for FY24, Tessolve expects to grow by 20% in FY25, driven by increasing demand from companies setting up testing and packaging units in India, including Tata Electronics’ first fabrication unit.
“All these units are turning to us because we’ve built the necessary infrastructure over the last 20 years, so they don’t need to seek service providers outside India for this expertise,” Chinamilli stated.
Tessolve’s solutions assist semiconductor manufacturing and packaging companies in speeding up their product launches, removing the need for them to invest in their own design, engineering, and testing processes. Their chips are used in various sectors, including automotive, power management, artificial intelligence (AI), electric vehicles, and data centers.
Chinamilli also noted that geopolitical factors are contributing to Tessolve’s growth, as companies seek alternatives to China for engineering and manufacturing. “We’ve been investing in India for the last 20 years, so we’re benefiting from that commitment,” he concluded.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
