Foxconn's India subsidiary Bharat FIH files for Rs 5,000-crore IPO

Foxconn's Bharat FIH is India's largest EMS provider to the mobile phone industry, with a 23 per cent market share in FY 2021

Bharat FIH, a subsidiary of Foxconn group, has filed its draft red herring prospectus (DRHP) for its initial public offering (IPO). The Rs 5,004-crore IPO comprises a fresh issue of Rs 2,502 crore and an offer for sale (OFS) of Rs 2,502 crore. The offer for sale is by its promoter, Wonderful Stars.

Wonderful Stars and FIH Mobile are its promoters, its prospectus stated. Wonderful Stars, together with its nominees, holds 99.97 per cent of the company’s shares.

FIH Mobile does not directly hold any shares in Bharat FIH. But it owns Wonderful Stars through its subsidiaries. As of September 30, 2021 Foxconn held 63.43 per cent of the share capital of FIH Mobile. 

Kotak Investment Banking, Citigroup Global Markets India, BNP Paribas and HSBC Securities and Capital Markets India are the bankers to the issue.

The company plans to utilise the proceeds of the fresh issue for funding its capital expenditure by upgradation and expansion of its campuses, investment in its subsidiary RSHTPL for financing its capital expenditure requirements, and funding working capital requirements.

According to an F&S report, Bharat FIH is India’s largest electronic manufacturing service provider with a 15 per cent market share as of financial year (FY21). In addition to its EMS services, which mainly comprise manufacturing services, the company helps build capabilities to provide Original Equipment Manufacturers (OEMs) with product design and development, component manufacturing and sourcing, logistics, and after-sales services. 

The company commenced operations in 2015 and has focused on manufacturing mobile phones. Bharat FIH is India's largest EMS provider to the mobile phone industry, with a 23 per cent market revenue share in Financial Year (FY) 2021. The company is the largest mobile phone manufacturing and assembly services provider to Xiaomi Technology.

Since March 2021, the company has expanded into other services, including mechanics, electric vehicles, televisions and hearables.

The company’s applications for production linked incentive schemes (PLIs) for the mobile phone, telecom and networking products, and IT hardware industries have been approved in October 2020, October 2021 and July 2021, respectively.