Zetwerk’s Amrit Acharya on Building India’s Contract Manufacturing Powerhouse

Amrit:
But during COVID, one big shift happened in India global customers started looking at India as an alternative to China. So we had to evolve. For the time being, let us create the capacity and the advantage we had was that I had a 100-crore PO. I’ve always viewed any disruption in the existing status quo as an opportunity.

Energy as a theme whether renewable, conventional, hydrogen, or nuclear will be one of the dominant themes in the economy over the next 10 years.

Zetwerk is a company that’s now a contract manufacturing unicorn, so obviously the attention is on us. What should a retail investor think about Zetwerk whenever our IPO hits the street?

As an investor whether retail or institutional  you can trust that we will deploy your money in a very capital-efficient way to grow the business with a long-term view. Of course, we’ll keep short-term performance in mind as much as we can, but we’re very wired to think if energy will be a big theme in 10 years, what should I do today to capture that wave?

We don’t know if India will become the next China in terms of manufacturing superpower, but we will be the next China as a company.

[Music]

Vivek:
Hello everyone, and welcome to another episode of Bazaar & Beyond, where we deep dive into the world of finance, investing, and more to help you make smart investment decisions.

I’m your host, Vivek.
This episode is special because we have a startup founder as our guest Amrit Acharya, co-founder and CEO of Zetwerk, India’s fastest-growing contract manufacturing platform.

He’s an IITian and has worked with McKinsey and ITC.
In 2018, Amrit and his co-founders started Zetwerk with the idea of simplifying manufacturing.
Since then, the startup has scaled across multiple verticals — electronics, renewables, aerospace, defense, and more.

Let’s start from the beginning how did Zetwerk come about? What’s your background, and how did you get the idea for a contract manufacturing business?

Amrit:
Thanks, thanks for having me. So, I grew up here in India and spent most of my life here. I went to college in Chennai and then joined ITC as my first job.

At ITC, my role was to help build a factory. When I joined, the company had just sanctioned a large investment to set up a new plant in Mysore. I was the fifth member of the team. Over two years, I learned how to build a factory buying machinery, hiring people, building software and it was very gratifying. At the end of it all, you had a big factory to show for your work.

That process was very fulfilling.

Later, I went to the US for my MBA, worked at McKinsey, and then decided to come back to India. When we were looking to start up, I reflected on my factory-building experience. I remembered managing 100–200 vendors with no software everything was manual. It just felt like something that could be done better. That was really the inspiration behind Zetwerk.

Vivek:
Why specifically contract manufacturing though?

Amrit:
That’s a problem I was familiar with.

When I was at ITC, I managed 100 vendors for various machinery and capex needs. Finding reliable vendors was very difficult — there was no database, you couldn’t just Google them. I’d ask my boss how to find suppliers, and he’d point me to an engineer who was 60 years old with a lot of experience. Out of the three suppliers he’d recommend, two would’ve shut down, and only one would still be active.

From that one, I’d find two more and so on.

Even after placing an order, the supplier would promise 30 days but deliver in 45–60. There were too many pain points finding suppliers, managing projects, ensuring quality. So it was a problem we understood deeply and that’s how we started.

Vivek:
Let’s talk about the marketplace model and how you connect suppliers with manufacturers.

Amrit:
Sure. Initially, our business was project-based for example, Tata Steel sets up a new plant in Orissa and needs machinery. We’d help build that machinery. That worked for the first two years, but it wasn’t repeat business. Customers only buy when they need a new plant, not every month. So we shifted to long-term production contracts one-year, two-year, even five- or eight-year contracts. Today, 60–70% of what we do is true contract manufacturing. That gives predictability I know my revenue for the next several years.

This shift happened during COVID, when global customers started looking at India as an alternative to China the whole “China plus one” strategy. Earlier, these companies imported from China without issues. But after COVID, they wanted to diversify, and that market didn’t exist before 2021.

So when we got large POs say ₹100 crore we could only find supply for ₹10–20 crore. That’s when we decided to create capacity ourselves. The advantage was that we already had the demand, so we weren’t taking risk like traditional manufacturers who build first and find customers later. Our marketplace model connects large manufacturers to small MSMEs across India. India has 100+ manufacturing clusters Trichy for metal fabrication, Pune for auto machining, etc. We tap into this existing capacity. We underwrite each supplier technically machinery, quality standards, capacity  and our software maps designs (like AutoCAD files) to the right suppliers. It’s scalable  to do ₹100 crore of revenue, we don’t need ₹100 crore of capex.

Today, about 70–80% of our work still follows the marketplace model, while 20–30% is in-house.

Vivek:
Interesting. Do you see that mix changing in the future?

Amrit:
It could. We’re flexible 20%, 30%, even 50% if needed. Our main goal is to ensure high-quality, on-time delivery with full transparency.

Our philosophy is: if India already has capacity, why create more? There are already 1 lakh fabrication shops — why build one more? It’s better to make the existing ecosystem more efficient.

But where there’s capacity shortage, we step in and create our own. That way, we complement our suppliers instead of competing with them.

Vivek:
Will near-term headwinds like tariffs or geopolitics hamper growth?

Amrit:
Not really. These things come and go, but over a 3–5-year horizon, fundamentals remain intact.

India’s workforce is young, the talent pool is large, and the domestic market is huge. If anything, these trends make India more attractive.

We’ve diversified too 80% of our supply is in India, and 20% in Mexico, Vietnam, and Eastern Europe. That gives flexibility — for a US client, we offer an affordable India solution, a faster Mexico solution, and an ultra-fast (but expensive) US solution.

Vivek:
You’ve taken bets in electronics and renewables recently. What’s your view on manufacturing growth in these sectors?

Amrit:
Energy will be one of the biggest themes of the next decade renewable, conventional, hydrogen, or nuclear.

For decades, China was the world’s factory. Today, countries want self-sufficiency — India with Make in India, the US with Make in America, etc. That’s driving industrialization, which depends heavily on energy.

Around 35–40% of our revenue comes from renewables, but we’re bullish on everything connected to power and energy infrastructure.

Vivek:
You’ve made several acquisitions lately. Are these for entering new verticals?

Amrit:
Yes. For example, we acquired a transformer company because transformers are critical for power evacuation in solar and AI infrastructure.

Today, there’s a global transformer shortage — lead times are 18–24 months. Schneider Electric is booked till 2030.

In the last six months, we’ve won nearly $150 million in transformer orders. By acquiring an existing company, we fast-tracked our entry by 1–2 years.

Our customers — L&T, Tata, Schneider, Samsung — are large, conservative organizations. It’s hard to get in, but once you do, you stay for life. Through M&A, we’re able to enter faster and then expand organically.

Vivek:
Your IPO is expected next year. What’s your pitch to a retail investor?

Amrit:
Think of us in two ways:

1. The end markets we serve — energy, electronics, aerospace, defense.
2. Our business model scalable, asset-light, and efficient.

To double revenue, we don’t need to double investment. That’s our biggest advantage.

Investors can trust that we’ll deploy capital efficiently, with long-term growth in mind. We constantly ask ourselves — what can we do today to capture the next decade’s opportunity?

Vivek:
What are the hurdles India faces in becoming a manufacturing powerhouse?

Amrit:
Three main ones:

1. Time horizon:
   Everyone wants quick results, but manufacturing is a 3–10 year game. China gets this they invest long-term, even before customers exist.
2. Time value of money:
   Speed matters. If you set up a plant in 6 months instead of 18, you save a year of revenue. We act fast, make some mistakes, but move ahead.
3. R&D mindset:
   Make in India isn’t enough without Design in India. If designs come from abroad, we’ll always be cost-plus. We need to build design and R&D capability here.

Vivek:
Advice for founders building manufacturing startups?

Amrit:
Have very high pain tolerance. It’s one of the hardest businesses to build.

Everything that can go wrong will go wrong delays, quality issues, labor challenges, machine breakdowns.

You need patience. Even after solving those problems, the next journey is improving beyond others — and that takes time.

Vivek:
Your losses have reduced, revenues are growing fast, and you’re generating free cash flow. What drove that?

Amrit:
A lot of it is natural. Our R&D and corporate costs have stayed flat while revenue has doubled — so fixed costs as a percentage have reduced. That’s operating leverage.

Think of a factory once utilization crosses 50–60%, profits accelerate. Now, if revenue grows 20%, margins can grow 50%. We’ve hit that stage, and this will continue over the next few years.

Vivek:
And finally, where do you see Zetwerk in five years?

Amrit:
Qualitatively, we want to be a systemically important company in Indian manufacturing.When customers face tough challenges in defense, energy, or electronics, we want them to think — Zetwerk can do it. Even if India doesn’t become the next China in manufacturing, Zetwerk can become the next China as a company — with multiple capabilities under one roof: mechanical, electrical, electronics a true one-stop shop.

That’s the goal.

Vivek (Closing):
Thank you so much, Amrit, for joining us.

In this episode, we explored how India’s manufacturing landscape is evolving and how Zetwerk is helping build local capacity to meet global demand.

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