Bharat FIH, a subsidiary of FIH Mobiles and a Foxconn Technology Group company, has received capital markets regulator Sebi’s go-ahead to raise Rs 5,000 crore through an Initial Public Offering (IPO).
The initial share sale of Bharat FIH comprises a fresh issue of shares worth Rs 2,502 crore and an offer for sale of up to Rs 2,502 crore by promoter group and Foxconn unit Wonderful Stars, according to the Draft Red Herring Prospectus (DRHP).
Bharat FIH makes devices for Xiaomi and Nokia. The company, which filed its preliminary IPO papers with Sebi in December 2021, obtained its observations on June 10, an update with the markets regulator showed on Monday.
“While we have historically been able to finance our capital expenditure through equity contributions from the promoter selling shareholder, Wonderful Stars, this may not be the case once we are a publicly-listed company.
We will have to finance our future growth from internal accruals and through external debt financing and equity fundraising,” the company said in its draft red herring prospectus (DRHP).
Other IPO Details
iPhone maker Foxconn’s India unit will have a 75% reservation for Qualified Institutional Buyers (QIB) while 15% of the portion will be reserved for Non-institutional Investors (NII). This would leave only 10% of the entire issue for retail investors.
Upon successful listing on BSE and NSE, Bharat FIH will join the likes of Dixon Technologies (India), and Amber Enterprises India. The average industry peer group P/E ratio stood at 168.82x, according to DRHP.
Bharat FIH has planned to use the funds raised through the fresh issue to fund capital expenditure requirements of the company towards up-gradation and expansion of their existing campuses.
The company also plans to invest in its subsidiary RSHTPL, for financing its capital expenditure requirements, and funding working capital requirements. The company, in its DRHP, said that it derives most of its revenue from Xiaomi, a mobile phone OEM based in China.
About Company
Bharat FIH, formerly Rising Stars Mobile India, is the largest Electronic Manufacturing Services (EMS) provider in India, with approximately 15 percent market revenue share in the financial year 2021.
In addition to EMS services, the company is building the capabilities to provide Original Equipment Manufacturers (OEMs) with a comprehensive, vertically integrated “one-stop solution” comprising a range of Original Design Manufacturer (ODM) services, including product design and development component manufacturing and sourcing, logistics, and after-sales services.
The company has also been expanding its business into high-growth industries other than mobile phones, including mechanics, electric vehicles, televisions, and wearables.
