Foxconn India Arm & Xiaomi Phone Maker Bharat FIH Files For Rs 5,000 Cr IPO

Given the significant under-penetration and increasing per capita usage of these products in India, the country’s total addressable EMS market is expected to grow to US$135 billion by Financial Year 2026 with a CAGR of 30.3% between Financial Years 2021 and 2026

Foxconn Technology Group company Bharat FIH, a top domestic electronic manufacturing services ( EMS) player and the largest mobile phone maker to market leader Xiaomi, has filed papers with Sebi to raise around Rs 5,000 crore via an IPO, people in the know told Moneycontrol.

“The IPO will comprise of a fresh issue component of Rs 2500 crore and an OFS ( offer for sale component) of Rs 2500 crore,” said one of the persons cited above. Another person confirmed the same.

Both spoke on the condition of anonymity.  Parent FIH Limited is listed in Hong Kong.

Moneycontrol has reviewed a copy of the 100 percent promoter held Bharat FIHs DRHP, according to which the net proceeds of the IPO will be used for-

    • Funding capital expenditure requirements towards up-gradation and expansion of existing campuses.
    • Investment in Subsidiary, RSHTPL, for financing its capital expenditure requirements;
    • Funding working capital requirements of the Company; and
    • General corporate purposes.

Kotak Mahindra Capital, Citi, BNP Paribas and HSBC Securities are the Investment bankers working on the IPO. Shardul Amarchand Mangaldas and S&R Associates are the legal advisors.

THE TRIGGER FOR THE LISTING 

The firm said in its DRHP, ” Since March 2021 we have been expanding our business into industries other than mobile phones, with a focus on high-growth industries that benefit from market tailwinds, including mechanics, electric vehicles, televisions, and hearables.

Some of these industries are expected to benefit from regulatory support such as production-linked incentive schemes (“PLIs”), which are part of the Government of India’s “Aatmanirbhar Bharat Abhiyaan”, or Self-Reliant India, campaign, which seeks to provide a range of PLIs and other benefits for manufacturing in India.”

“Our applications for PLIs for the mobile phone, telecom and networking products, and IT hardware industries have been approved in October 2020, October 2021, and July 2021.

Given the significant under-penetration and increasing per capita usage of these products in India, the country’s total addressable EMS market is expected to grow to US$135 billion by Financial Year 2026 with a CAGR of 30.3% between Financial Years 2021 and 2026, giving us substantial growth opportunities to diversify into these new high-growth industries and provide new categories of customers with a range of service offerings, ” it said.

Bharat FIH  conducts its operations across three campuses based in the states of Andhra Pradesh and Tamil Nadu in India, each of which integrates manufacturing, warehousing, logistics and accommodation facilities. The campuses comprise an aggregate of 94 production lines, consisting of 29 surface mount technology (SMT) lines, 35 assembly lines and 30 sub-assembly mechanics lines.

The operations are enhanced by its product research and development teams, including at a recently inaugurated R&D centre based at the Indian Institute of Technology (Madras) Research Park. It’ R&D capabilities will enable us to offer customers innovative EMS and ODM solutions, and also provide technological solutions to increase operational and cost efficiencies in our own processes.

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