India’s Silent Surveillance Shakeup: The $4 Billion CCTV Opportunity No One's Watching
With 95% of the market disrupted and few compliant players, this is an early stage opportunity we’re the first to flag.
At Nine One Capital, we continuously scout for investment themes backed by structural industry shifts, clear regulatory support, and significant competitive advantages. Today, we are spotlighting a rapidly transforming sector which is India’s CCTV manufacturing industry. This sector, led by regulatory tailwinds, is poised for substantial domestic consolidation and growth and there are only 2 to 3 direct listed companies which will benefit from this. We believe we are among the first investors to identify and highlight this significant regulatory tailwind, positioning ourselves early in this evolving investment opportunity.
Understanding the Market Dynamics and Regulatory Inflexion Point
India's CCTV market currently stands at approximately $4 billion, growing robustly at around 10% CAGR. Historically, this market has been overwhelmingly dominated by Chinese products, accounting for more than 95% market share through direct imports or indirect assembly. This scenario, however, is undergoing a radical transformation driven by a decisive regulatory shift.
On April 9, 2025, the Indian government, through the Ministry of Electronics and Information Technology (MeitY) and the Ministry of Home Affairs (MHA), introduced stringent regulations to safeguard national security and data sovereignty. The new mandates enforce:
A ban on Chinese origin critical components (e.g., PCBs and chipsets) in government CCTV procurement.
Mandatory STQC certification for all CCTV models.
Firmware and cybersecurity infrastructure to be fully developed, hosted, and managed within India.
Minimum domestic value addition targets which are expected to rise further in the coming years.
These regulations have created significant disruption in the existing supply chain, effectively paving the way for a new wave of Indian manufacturers.
Immediate Industry Impact
Since implementation, only 17 CCTV models have cleared certification, while over 350 models remain backlogged awaiting STQC approval. Industry participants report that distributors are currently offloading residual Chinese inventory, with new orders at a standstill due to compliance issues.
Investor Opportunity
This scenario closely mirrors the early stages of the domestic mobile phone, LED, and electric vehicle industries in India, where regulatory interventions and import substitution led to significant value creation by domestic players. We foresee similar outcomes in the CCTV industry, with sizeable opportunities emerging across:
Government and defense contracts
Smart city and public infrastructure projects
Institutional and corporate procurement (airports, railways, malls, hospitals)
Potential eventual expansion into consumer and export markets
In Depth Due Diligence and Industry Validation
Given the limited availability of secondary research material on this sector, we dedicated significant time to identifying relevant experts and industry insiders, building our insights through comprehensive ground up primary research. Our conviction in this opportunity is bolstered by extensive interactions, including:
Three industry veterans, each with over 20 years of operational expertise in CCTV and surveillance technologies.
Promoters of two significant unlisted CCTV manufacturers actively navigating the transition to compliance.
Founders and promoters of three listed entities directly impacted by regulatory changes.
These expert discussions provided granular insights into the regulatory complexities, certification timelines, and capacity bottlenecks, guiding us toward the most viable investment candidates.
Insights in brief from Industry Experts
Our recent expert interactions provide additional validation. According to a seasoned industry expert, the supply chain disruptions are expected to stabilize within 2 to 3 quarters, paving the way for Indian players to substitute nearly 70% of current imports. A continued volume CAGR of approximately 25% in the CCTV camera segment is anticipated post supply chain normalization. High entry barriers such as securing reliable System on Chip (SoC) suppliers and achieving scale, make it challenging for new entrants. STQC norms are stricter than those enforced by the US’s National Defence Authorization Act (NDAA), providing further advantage to certified domestic manufacturers.
Identifying Our Preferred Play
India’s regulatory overhaul in the CCTV space presents a powerful thematic opportunity but with a limited number of credible listed players, the window to participate meaningfully is narrow. The sector remains under researched and underappreciated, creating a fertile ground for early movers. The company we have identified stands out for its credible execution capabilities, disciplined financial approach, and strategic alignment with the regulatory tailwinds. This rare combination of scarcity, structural tailwinds, and asymmetric upside makes it a compelling candidate for wealth creation.
Among the select few credible plays in this space, we have identified a differentiated small cap company that is exceptionally well positioned to benefit from this structural transformation. Here is a brief overview of this company:
A robust track record of debt free operations and zero equity dilution since IPO.
Proven expertise in hardware solutions where it is entering high margin and high growth segments.
Recently commissioned a state of the art SMT line, now leveraged to manufacture regulatory compliant CCTV systems and high end hardware equipment.
Clear visibility toward scaling revenues from approximately ₹60 to 70 crore in the first year of CCTV operations (FY26) to potentially ₹500 crore over the medium term.
This company is strategically shifting from a stable but lower margin telecom business toward higher margin, innovation driven segments. With the regulatory winds at its back, the firm offers a compelling risk reward proposition: minimal downside at conservative valuations and significant upside potential.
Exclusive Research Report Release
We are releasing our comprehensive research report today after market hours exclusively to our subscribers. The report delves deeply into the regulatory environment, expert insights, market landscape, and provides a detailed investment thesis on our identified company. Additionally, our detailed call notes and valuation scenarios for the company are comprehensively covered and shared within the report.
For investors seeking high quality, asymmetric opportunities driven by structural tailwinds and regulatory inflections, this in depth report offers timely and actionable insights.
Important Note and Disclaimer: Please note that this note is shared only for the education purpose and in no way, it constitutes any buying or selling recommendation.
If you are interested in accessing our research and joining a network of well informed investors, please contact us at Gaurav.a@nineonecapital.in
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