In January, 360 One made an unusual bet in private capital. The asset-management company raised Rs 1,000 crore ($108 million) for one of the country’s first dedicated defence and aerospace funds.

The fund plans to back 15–20 companies across stages, and has already invested in four, including space-surveillance startup Digantara and defence-electronics firm Core El Technologies. To meet high investor demand, the company is also exercising a Rs 500-crore greenshoe optionA provision that allows fund managers to raise more money.

“These investments are coming at an inflection point for the sector,” said an analyst at 360 One.

Over the past five years, India has restricted imports of several defence items and opened up the space for local manufacturing. As a result, private companies accountedPIBDefence production soars to an all-time high of Rs 1.51 lakh crore in FY 2024-25 for 23% of the country’s defence production in FY25—up from 19% in FY21. In the same period, India’s defence exports have nearly tripled to over Rs 23,600 crore. About 92%PIBExports at ₹23,622 crore in FY 2024-25, while production hit ₹1.27 lakh crore in FY 2023-24 of the over 190 defence contracts in FY25 were signed by domestic firms.

The world, too, is seeing more geopolitical tensions, causing the global military spending to hit a record $2.7 trillion in 2025.

For wealth managers, betting on defence now means offering their clients strategic exposure to an industry that’s ripe with opportunity.

But this wasn’t the case so far.

Globally, defence tech has been typically funded and scaled either directly by governments or by a set of specialist venture-capital firms. That’s because companies took decades to bring out fresh products, were subjected to a lumpy procurement cycle, and even gave slower exits to their investors.

Even in India, 360 One has limited direct competition from other wealth and asset managers. HDFC AMC’s defence fund, which manages assets worth Rs 8,000 crore, offers exposure to listed defence stocks. The Maharashtra state-funded defence and aerospace venture fund, with an AUM of over Rs 300 crore, is a privately-pooled alternative investment fund.

© The Ken