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The largest electronic manufacturing services (EMS) provider in India, Bharat FIH has received market regulator Sebi's approval for an initial public offering (IPO) aggregating to ₹5,000 crore.
Bharat FIH is a subsidiary of FIH Mobile a leading manufacturing services provider for the mobile handset industry, which is a part of Foxconn Technology Group. The company makes devices for Xiaomi and Nokia.
Bharat FIH had filed its draft prospectus in December last year, to raise ₹5,003.8 crore from the IPO. The IPO size comprises a fresh issue worth ₹2,501.9 crore and an offer for sale up to ₹2,501.9 crore by Wonderful Stars.
As per Sebi's latest update, the regulator issued an observation letter on June 10, to Bharat FIH.
Under the IPO, 75% of the offer is reserved for qualified institutional buyers, while 15% of the size is allotted for non-institutional investors and the remaining 10% for retail individual investors.
Kotak Mahindra Capital, Citigroup Global Markets, BNP Paribas, and HSBC Securities and Capital Markets are acting as the book-running lead managers.
From the total proceeds of fresh issue, Bharat FIH aims to utilise - ₹1,058.2 crore for funding CAPEX requirements of the company towards the expansion of its existing campuses; while ₹36.33 crore is expected to be utilised for investment in subsidiary RSHTPL for financing CAPEX requirements; nearly ₹707 crore is expected to used for working capital requirements of the company, and general corporate purposes.
The proceeds from the offer for sale will be utilised by Wonderful Stars.
Currently, Wonderful Stars hold 99.97% in the company, while the remaining 0.03% is held by Aptech Electronics.
According to the F&S report, Bharat FIH is the largest Electronic Manufacturing Services (EMS) provider in India, with approximately 15% market revenue share in Financial Year 2021 and more than twice the revenue of the second-largest EMS provider in the country for the same fiscal. In the mobile industry, the company holds a market share of 23% in India during FY21.
In addition to EMS, the company is building capabilities to provide Original Equipment Manufacturers (OEMs), who are its brand-owning customers, 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.
Further, the company's service offerings are aimed at enabling customers to reduce manufacturing costs, improve supply chain management, reduce inventory obsolescence and product fulfillment time, and accelerate their time-to-market, time-to-volume, and time-to-money requirements.
