 "IPO, Investment")
Foxconn's subsidiary Bharat FIH has scrapped its plans to raise Rs 5,000 crore via an initial public offer (IPO), Mint reported on Friday. The company had received the market regulator's nod for the IPO in June last year.
According to the report, the decision has been taken due to weak smartphone market conditions and changes in the company's internal strategy. The IPO can, however, be relooked at next year, it added.
"I would say that not just the market conditions, there are several other factors for the IPO to have been stalled. The business in India is evolving and given the latest developments, the marketing plan has to incorporate it. The document filed (with Sebi) is also quite dated," a banker aware of the matter was quoted in the report as saying by Mint.
According to the draft red herring prospectus (DRHP), the planned IPO comprised a fresh issue of shares worth Rs 2,502 crore and an offer for sale (OFS) of up to Rs 2,502 crore by promoter group and Foxconn unit Wonderful Stars.
The Securities and Exchange Board of India (Sebi) had given its thumbs up to the IPO on June 10, 2022.
Foxconn currently makes iPhones in India. It has also won contracts to make AirPods in India. In its financial statement, Bharat FIH said that it was also looking to expand beyond mobile phones with a focus on mechanics, electric vehicles, televisions, and hearables.
The company clocked revenue of Rs 18,149 crore and a profit of Rs 202 crore for the financial year that ended on March 31, 2022. It was higher than revenue of Rs 15,854 crore and profit of Rs 162 crore in the previous year.
