India’s semiconductor stocks: large cap vs mid cap

India is no longer just a consumer of semiconductors; it is rapidly emerging as a manufacturer too. With the India Semiconductor Mission (ISM) pledging over ₹76,000 crores to develop semiconductor capabilities in the country and the first ‘Made-in-India’ semiconductors ready to roll out, the investment story has significantly changed. However, to invest in semiconductor stocks listed on exchanges in India, it is important to understand the difference between large-cap companies and mid-cap companies.

The big picture: a market worth $100 billion by 2030

The semiconductor industry in India is estimated to increase from a current value of $54 billion in 2025 to more than $100 billion in 2030. The increase is estimated to be a compound annual growth rate of 12-13%. The Union Budget for 2026-27 further supported the growth trend in the industry. It launched ISM 2.0, increased outlay for the Electronics Components Manufacturing Scheme to Rs. 40,000 crore, and doubled financial support for new semiconductor manufacturing facilities. All demand drivers are accelerating at the same time.

Large-cap picks: stability with semiconductor exposure

Unlike their American counterparts, large-cap semiconductor-adjacent stocks in India are not pure play chipmakers. They are diversified conglomerates whose foray into semiconductors provides optionality to existing profitable businesses.

• HCL Technologies (market cap: ~₹3.67 lakh crore): HCL Tech is India’s largest large-cap semiconductor services company. It provides chip design, embedded engineering, and VLSI services to global tech companies. With over 2,26,000 employees across 60 countries, a PE ratio of ~21, and a dividend yield of 4.43%, HCL Tech gives investors exposure to chip design without the capital expenditure required for a fab.
• Bharat Electronics Limited – BEL ( defence & semiconductor ): BEL reported a 24% YoY increase in revenue for Q3 FY26. The company also has a robust order book of ₹744.5 billion. BEL has signed an MoU with Tata Electronics for indigenous solutions in semiconductors. This is a clear shift of focus for the company from defence hardware to semiconductors.
• CG Power and industrial solutions: From its inception as an electrical engineering conglomerate, CG Power has made its foray into the world of semiconductors. CG Power’s subsidiary, CG Semi, inaugurated India’s first full-service Outsourced Semiconductor Assembly and Test (OSAT) facility in August 2025 in Sanand, Gujarat. CG Power is thus only the second large-cap company to have actual semiconductor manufacturing facilities in India.

Mid-cap picks: higher risk, higher semiconductor purity

Investors can make a more direct, if riskier, bet on India's semiconductor manufacturing plans with mid-cap stocks. 

• Kaynes Technology India: Kaynes may be the most promising of the mid-caps. The OSAT plant in Sanand has hit a milestone: India's first commercially manufactured multi-chip modules were dispatched to Alpha & Omega Semiconductor (USA) in October 2025. Revenues for FY25 grew 51%, and EBITDA rose 62%. The upcoming multilayer HDI PCB plant in Chennai and the acquisition of Canada's August Electronics demonstrate the company's thinking globally while acting locally.
• Tata Elxsi: Tata Elxsi works in the area where semiconductor design, embedded engineering, and auto-electronics meet. These are areas that are at the heart of the EV and self-driving revolution. Tata Elxsi boasts an ROE of 29.26%, and its ROCE stands at 34.31%, making it exceptional in its returns, while its short-term stock performance remains challenged.
• MosChip Technologies: MosChip is another semiconductor company specialising in design and boasting over two decades of experience in ASIC and SoC design. It won a contract worth ₹50 billion from C-DAC to design a high-performance computing SoC on a 5nm process technology – this is a vote of confidence in India’s internal design ecosystem.

Key risks to keep in mind

Investing in semiconductors in India is not devoid of risks. Most of the listed companies are not pure-play semiconductor companies but are in the adjacent space. The capital expenditure costs are huge, and the gestation period is long in this sector. India is a net importer of semiconductors from Taiwan, China, Korea, and Vietnam. Technology obsolescence is a continuous risk, and the risk of execution is always a reality in India.

Conclusion

India's semiconductor journey is moving from policy to production. Large caps like HCL Tech, BEL, and CG Power provide a relatively safe way to play the theme with diversified earnings streams, while mid-caps like Kaynes and MosChip provide a purer and riskier play on the chip manufacturing revolution. Ideally, a balanced portfolio would include a mix of both,  the stability of large-cap semiconductor adjacency to provide ballast to the position, and a selective bet on the mid-caps where there is already evidence of real operational milestones.