Bharat FIH Ltd IPO

Upcoming DRHP

IPO Synopsis

Details on IPO
Hong Kong’s FIH Mobile Ltd's Indian subsidiary, Bharat FIH, plans to raise Rs. 50.04 billion via an initial public offering. 
The offer comprises of a fresh issue of shares of up to Rs.25.02 billion and an offer for sale of shares up to Rs. 25.02 billion by promoter group and Foxconn unit Wonderful Stars.
Currently, Wonderful Stars holds 99.97% stake in the firm.
Citigroup Global Markets India, BNP Paribas, HSBC Securities and Capital Markets (India) are among the lead book runners for Bharat FIH's IPO.

Objective of the Issue
The proceeds from the issue will be used for:
•    funding capital expenditure requirements of the company towards expansion of its existing campuses, 
•    investment in subsidiary, RSHTPL 
•    to support working capital requirements
•    general corporate purposes
 

About Bharat FIH Ltd

Bharat FIH is the largest Electronic Manufacturing Services (EMS) provider in India, with approximately 15% market revenue share and more than twice the revenue of the second largest EMS provider in the country in 2021. 
Bharat FIH is a subsidiary of FIH Mobile Limited (“FIH Mobile”), which is a leading manufacturing services provider for the mobile handset industry. FIH Mobile is a part of the Foxconn Technology Group, a Taiwan headquartered Fortune 30 group, which is the global leader in the EMS business with 22.7% share of global EMS operating revenue in 2020.
Additionally, to the EMS services, which mainly comprise manufacturing services, Bharat FIH is also building the capabilities to provide Original Equipment Manufacturers (OEMs), with a comprehensive, vertically integrated “one-stop solution” comprising a range of Original Design Manufacturing (ODM) services including product design and development, component manufacturing and sourcing, logistics, and after-sales services.
It is also the largest mobile phone manufacturing and assembly services provider to Xiaomi Technology India Private Limited (“Xiaomi”), which is the leader in the Indian smart phone industry with 27% and 26% market share by volume in 2021 and the six months ended 30 September 2021, respectively. In the same period, the company had a 39% and 50% share of Xiaomi’s mobile phone sales by volume.
The operations are held 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.
 

Financials

 

Particulars (in Rs. Crores)

FY21

FY20

FY19

Revenue

15854.86

26635.56

34345.39

EBITDA

386.93

693.28

-26.92

PAT

196.51

473.37

-211.33

EPS (basic in Rs.)

0.68

2.08

-1.57

ROE

5.71%

14.57%

-14.22%

ROCE

9.72%

26.55%

-12.33%

 

Particulars (in Rs. Crores)

FY21

FY20

FY19

Total Assets

8712.09

8623.15

8899.92

Share Capital

2380.95

2380.95

1665.95

Total Borrowings

0.00

0.00

1066.20

 

Particulars (in Rs. Crores)

FY21

FY20

FY19

Net cash generated from / (used in) operating activities

-76.07

1101.51

-532.93

Net cash from / (used in) investing activities

-163.45

-171.69

-536.93

Net cash flow from / (used in) financing activities

-45.54

-408.63

1341.70

Net increase (decrease) in cash and cash equivalents

-285.06

521.20

271.85

 

Peer Comparison

 

Name of the company

Total Revenue (in Rs. crores)

Basic EPS

NAV Rs. per share

PE

RoNW %

Bharat FIH Limited

15,854.86

0.68

11.91

NA

5.71%

Dixon Technologies (India) Limited

6,448.17

27.49

126.84

206.62

21.67%

Amber Enterprises India Limited

3,030.52

24.96

490.71

131.02

5.19%


The Key Points are-

Key Points

  • Strengths

    1.    Largest EMS provider in India by revenue market share, with the size, scale and competencies to pursue substantial growth opportunities in the EMS 
    2.    Availability of Performance Linked Incentives
    3.    Long-term, strategic relationships with industry leading OEM customers
    4.    Large-scale, high quality and state-of-the-art manufacturing and assembly capabilities
    5.    In-house capabilities across the ODM value chain, enabling vertical integration
    6.    Resilient, capital efficient business with stable working capital cycle
     

  • Risks

    1.    Derive most of its revenue from a single customer
    2.    Shortages in the supply of the major production inputs which has and may again disrupt the business operations
    3.    May not be able to anticipate and adapt to rapid technological changes and continue offering high quality products and services.
    4.    May not be able to successfully expand the EMS business into higher margin ODM services
    5.    Face significant competitive pressures in a market characterised by are characterised by factors such as rapid technological change, the development of new end products and their rapid obsolescence, evolving industry standards and significant price erosion over the life of a product
     

How to apply for an IPO?

  • Login to your 5paisa account and select the issue in the current IPO section

  • Enter the number of lots and price at which you wish to apply for

  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange

  • You will receive a mandate notification to block funds in your UPI app

  • Approve the mandate request on your UPI and funds will be blocked

Open Demat Account