Thread by @zerodhamarkets

Something fascinating is happening in Andhra Pradesh. Companies across sectors, from clean energy to electronics to oil, keep announcing massive projects there. We noticed this pattern in conference calls and interviews, and we're not alone.🧵👇

SOIC founder Ishmohit spotted the same trend. Why is a single Indian state getting this much attention? What's driving this investment rush? The answer lies in a story that began 11 years ago with a painful division.

In 2014, old Andhra Pradesh was split into Telangana and a smaller AP. This wasn't equal, Hyderabad, the capital that made up 30% of the old state's GDP, now belonged to Telangana. Most economic heft was gone overnight.

Residents were furious. Violent protests erupted, huge power blackouts followed. The Centre provided some financial aid, but one thing was clear, the new AP would have to build an economic presence from scratch, transforming from agrarian to industrial.

Since 2015, AP has grown at nearly 12% annually. Over the last five years, it's consistently ranked among India's fastest-growing states. Project commitments worth ₹45,000 crore over the next 5 years show this isn't accidental.

Andhra offers investors a compelling pitch built on natural advantages. First, a large, cheap, skilled workforce. It's one of India's largest contributors to engineering talent, with 250+ engineering colleges and top IIT-JEE enrollment numbers.

Energy is another ace card. AP is one of India's most energy-efficient states with power surplus most years. It's also a top 10 state by clean energy capacity. Just last week, AP cleared ₹43,358 crores worth of renewables investments, 2,600 MW capacity.

For context, that 2,600 MW is over half the peak electricity demand of a metropolis like Hyderabad (4-5 GW). The state is serious about becoming an energy powerhouse alongside its industrial ambitions.

Natural resources abound too. AP holds 22% of India's bauxite for aluminium production and some of the world's largest barytes deposits for plastics, rubber and oil drilling. Recently discovered oil has ONGC investing ₹4,600 crores in infrastructure.

Location matters enormously. AP's long coastline features 6 operational ports making up 15% of India's total port capacity. This includes massive Vishakhapatnam Port, among India's top 5 largest by volume, connecting to global markets seamlessly.

The state boasts one of India's largest road networks with close connections to three major industrial corridors, Vizag-Chennai, Chennai-Bangalore, Hyderabad-Bangalore. For any industry, this means skilled workers, energy, raw materials and market access.

But natural advantages alone don't explain the rush. AP has introduced major pro-business policies, centered around 47 Special Economic Zones. These offer tax holidays, lighter regulation, faster clearances, plug-and-play infrastructure for self-sustaining business ecosystems.

Some SEZs are entire new cities. Sri City is South India's largest industrial park. New capital Amravati was designed as an industrial and technology hub. Even temple city Tirupati has a dedicated mobile manufacturing hub.

The perks are fantastic. The LIFT Policy offers IT firms land at 99 paise per acre per year if requirements are met. Electronics manufacturers get 75% land discounts plus 100% electricity tax exemption for 6 years.

This creates wild bidding wars. Foxconn was wooed by AP, Telangana and Karnataka. Andhra reportedly offered 2,500 acres at special rates, the size of a medium town. Foxconn hasn't decided yet, but it shows AP's commitment level.

Red tape reduction matters too. All approvals happen within 21 days through streamlined processes. AP consistently tops India's Ease of Doing Business rankings. This year, AP recorded the highest capital expenditure increase among all states at 69%.

Results are visible across sectors. Pharmaceuticals see multiple Indian and global clusters. Korean automaker Kia, with 6% of India's passenger vehicle market, has its only Indian factory worth $2 billion in AP. Hero MotoCorp and Ashok Leyland have big presence too.

Electronics manufacturing is a priority with ₹4,600 crore subsidies. AP will soon host one of India's first private chip fabs, ₹14,000 crore joint venture between IndiChip and Japan's Yitoa Micro. LG is investing ₹5,000 crore in its third Indian unit.

Dixon Electronics and Wingtech have set up in Tirupati. For software, AP seeks a piece of India's GCC boom. Google is building its largest Asian data center worth $6 billion in Vizag. The state targets big, technologically advanced, capital-intensive industries.

But ambition comes with costs. Massive subsidies require borrowed money. AP's debt ratios are well above median. Chief Minister Chandrababu Naidu admits "Borrowing at high interest rates with stagnant revenue has trapped AP in a debt spiral."

Debt repayment has pushed the state into ₹35,000 crore fiscal deficit. While courting private investment, AP struggles with its own capex, often falling short of budget estimates. Success stories like Sri City coexist with empty industrial parks and ghost towns like Amravati.

AP walks a tightrope. Massive borrowed spending could create debt traps with abandoned parks. But success could yield one of India's most powerful industrial bases and renewed prosperity. Either way, it's an exciting moment to watch unfold.

We cover this and one more interesting story in today's edition of The Daily Brief. Watch on YouTube, read on Substack, or listen on Spotify, Apple Podcasts, or wherever you get your podcasts.

All links here:thedailybrief.zerodha.com/p/from-coastli…