Mumbai : Bharat FIH Limited, the Indian arm of Taiwanese mobile phone maker Foxconn, has filed draft documents for a proposed public listing in India to mobilize as much as possible. 5,003.8 crore on Wednesday.
The proposed initial share sale aims to raise 2,501.9 crore fresh capital. In addition, the Foxconn entity holding shares of Bharat FIH will sell a portion of its stake to raise the same amount.
According to the draft prospectus filed with the Securities and Exchange Board of India, the new capital will be used for upgradation and expansion of facilities, investing in a subsidiary to meet capital expenditure requirements, meeting working capital requirements and other corporate purposes will be done.
India has had a record year for Initial Public Offerings (IPOs), with strong trading debuts of big IPOs like Nykaa and Zomato adding to the excitement for such share sales. This has encouraged more firms to tap the public markets to raise funds.
The maker of the Xiaomi brand of mobile phones claims to be the largest electronics manufacturing service provider in India, with around 15% revenue market share in the financial year ended March 31, and more than double the revenue of the second largest EMS provider. The country said in its draft prospectus, citing the Frost & Sullivan Report. It did not name the second largest EMS provider. EMS refers to companies that manufacture electronic components and assemblies for original equipment manufacturers.
Foxconn has three facilities in India in Andhra Pradesh and Tamil Nadu.
“We are the largest mobile phone manufacturing and assembly service provider to Xiaomi Technology India Pvt. Ltd, which is the leader in the Indian smartphone industry with 27% and 26% market share in the fiscal year 2021 and six months ended 30 September. In those periods, we accounted for 39% and 50% of Xiaomi’s mobile phone sales,” it said.
Foxconn said that from March this year, it is expanding its India business into industries other than mobile phones, with a focus on high-growth industries, which are mechanics, electric vehicles, television and hearing aids. Like benefiting from market tailwinds.
“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 Atmanirbhar Bharat Abhiyan or Atmanirbhar Bharat Abhiyan, which seeks to provide a range of incentives to India. Our applications for PLI for the mobile phone, telecommunications and networking products and IT hardware industries have been approved in October 2020, October 2021 and July 2021.
Given the significant under-penetration and rising per capita usage of these products, the country’s total addressable EMS market is expected to grow to $135 billion by fiscal year 2026, with an average annual growth of 30.3% over five years, the company said. . ,
During the financial years 2019, 2020 and 2021, the Foxconn unit recorded a revenue of 34,345 crore, 26,636 crore and 15,855 crores respectively.
“Our business experienced revenue contraction due to the effects of the COVID-19 pandemic, along with market factors affecting the mobile phone industry and our OEM customers. Despite the challenges affecting our business and industry, we have generated revenue from the operations of 10,155.79 crore in the six months ended 30 September 2021 as compared to 6,394.57 crore in the six months ended 30 September 2020,” the company said.
For the six months ended 30th September, the company reported a net profit of 89.17 crore, a little more than 88.18 crore in the same period last year.
Investment banks Kotak Mahindra Capital, Citigroup, BNP Paribas and HSBC Bharat will advise FIH on the initial share sale.
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