Foxconn India Unit Files for Rs.5,054 Cr IPO

Foxconn India Unit Files for Rs.5,054 Cr IPO

by 5paisa Research Team Last Updated: Dec 13, 2022 - 03:23 pm 43.3k Views
Listen icon

Bharat FIH, the Indian unit of Foxconn of Taiwan, has filed its draft red herring prospectus (DRHP) with SEBI for its proposed Rs.5,004 crore IPO. The IPO will comprise of a fresh issue of Rs.2,502 crore and an offer for sale of Rs.2,502 crore. The DRHP normally takes about 2-3 months to get SEBI approval so IPO should happen around the second quarter of 2022.

Foxconn globally is one of the largest contract manufacturers for many high end products including Apple phones. In India, its subsidiary Bharat FIH is predominantly an Electronic Manufacturing Service (EMS) company with specialization in mobile phones. Bharat FIH is the largest contract manufacturer for electronic products in with 15% market share.

Bharat FIH is currently an indirect 100% subsidiary of Foxconn. The parent FIH owns stake in Bharat FIH through Wonderful Stars Pte Ltd. The offer for sale participation will be by Wonderful Stars Pte Ltd. However, FIH has already clarified that its stake will not go below 75% in its India business and it would look to hive off at the most 25% of holdings via OFS.

The utilization of the IPO fresh issue proceeds is quite interesting. Bharat FIH plans to use the IPO proceeds to pay a special dividend to the shareholders of the company. In addition, part of the funds will also be utilized to finance its regular working capital requirement and to have enough cash for its regular operations.

Ironically, the IPO announcement comes at a time when the Foxconn plant near Chennai has been mired in controversy following the food poisoning incident in the company. The plant remains shut during the week and it remains to be seen if the issue will really have a bearing on the prospects of the Bharat FIH IPO.

In India, Bharat FIH derives most of its revenues from the largest selling mobile phone in India, Xiaomi. For the electronics industry, Bharat FIH not only provides contract manufacturing, but also gives them support in design, prototypes, product tweaking, after sales service, repairs and maintenance etc.

While mobile phones are the big segment of Bharat FIH, it also has a strong franchise in outsourcing the production of electric vehicles, television sets and hearables. In India, Bharat FIH faces competition from other professional outsourcing companies like Dixon, Flextronics, Jabi, Optiemus Infracomm etc.

The IPO of Bharat FIH will be lead managed by Citigroup Global Markets, BNP Paribas and HSBC Securities. They will act as the book running lead managers or the BRLMs.

Also Read:-

Upcoming IPOs in 2021

Upcoming IPOs in December 2021

How do you rate this blog?

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage


About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Open Free Demat Account
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Swing Trading Stocks: Week of 26 February 2024

Swing Trading Stocks for the Week

How ONDC is changing the ecommerce game in India?

One company is shaking things up in the ecommerce space. And that isn’t a flashy VC backed start-up. It's a company backed by the Indian government. I am talking about Open Network for Digital Commerce (ONDC). It has recorded a whopping 5.5 million transactions in December – its highest monthly figure since its inception.  To put this into perspective, in January of the previous year, ONDC had only logged 2,000 orders.

Analysis of Upcoming IPO - Platinum Industries Limited

What Platinum Industries Limited do? Platinum Industries Limited is stabilizer-producing firm that was founded in August 2016. firm produces lubricants, CPVC additives, & PVC stabilizers. Products from firm are utilized in packaging materials, rigid PVC foam boards, SPC floor tiles, electrical wires & cables, PVC fittings, PVC pipes, & more. Situated in Palghar, Maharashtra, company's production facility has 21,000 square feet of land.