About the Company:
Bharat FIH Ltd is the largest Electronic Manufacturing Services (EMS) provider in India, with approximately 15% market revenue share in Financial Year 2021.
Company’s service offerings are aimed at enabling customers to reduce manufacturing costs, improve supply chain management, reduce inventory obsolescence and product fulfilment time, and accelerate their time-to-market, time-to-volume and time-to-money requirements.
Company is the largest mobile phone manufacturing and assembly services provider to Xiaomi Technology India Private Limited (“Xiaomi”), which is the leader in the Indian smart phoneindustry with 27% market share by volume in Financial Year 2021.
Company’s client list includes names like Xiaomi, Ather Energy and Ola Electric (electric vehicles), Vu Technologies (“VU”) (televisions), a major global telecom network customer and ZTE Telecom India (“ZTE”) (telecom and networking products), and Imagine Marketing (“boAt”) (hearables).
Since commencing operations in 2015, company has focused on the manufacturing of mobile phones. Company is the largest EMS provider to the mobile phone industry in India, with 23% market revenue share in Financial Year 2021.
Company is 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 Financial Year 2021 and the six months ended 30 September 2021.
In those periods company had a 39% and 50% share of Xiaomi’s mobile phone sales by volume.
Foxconn Technology Group:
Bharat FIH Ltd is a subsidiary of FIH Mobile Limited (“FIH Mobile”), which is a leading manufacturing services provider for the mobile handset industry with over 56,000 employees globally (including its subsidiaries) as at 30 June 2021.
FIH Mobile, which has been listed on the Hong Kong Stock Exchange since 2005, is 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.
Company’s Manufacturing Facilities:
Company conducts operations 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.
Company’s campuses comprise an aggregate of 94 production lines, consisting of 29 surface mount technology (SMT) lines, 35 assembly lines and 30 sub-assembly mechanics lines. Company’s campuses are staffed by a workforce of over 25,000.
Company caters to the following Sectors:
- Mobile Phones.
- Electric Vehicles.
- Telecom and networking products.
- IT Hardware.
Government of India’s “Aatmanirbhar Bharat Abhiyaan”:
Since March 2021 company has been expanding business into industries other than mobile phones, with a focus on high growth industries that benefit from market tailwinds, including mechanics, electric vehicles, televisions and hearables.
Company has been successful in obtaining business from market leading brands in some of the new industries we are expanding into.
Some of these industries are expected to benefit from regulatory support such as production-linked incentive schemes (“PLIs”), which are part of the Government of India’s “Aatmanirbhar Bharat Abhiyaan”, or Self-Reliant India, campaign, which seeks to provide a range of PLIs and other benefits for manufacturing in India.
Company’s applications for PLIs for the mobile phone, telecom and networking products, and IT hardware industries have been approved in October 2020, October 2021 and July 2021.
Competitive landscape of EMS market in India.
More than 700 global and domestic companies operate in the Indian EMS/ODM market. The top three players account for around 27% of the market.
Bharat FIH is the market leader, accounting for approximately 15% of the market. Flextronics, Dixon, Amber and Jabil are some of the leading players in the market.
Mobile phone market share by EMS companies, by value, in %, India, FY21.
- Mr. Yu Yang Chih (Designation: Chairman and Non-Executive Director)
- Mr. Clement Joshua Foulger (Designation: Managing Director)
Objectives of the Issue:
Offer for Sale: (Rs. )
- Each of the Selling Shareholders will be entitled to the proceeds of the Offer for Sale. Company will not receive any proceeds from the Offer for Sale.
Fresh Issue: (Rs.)
- Funding capital expenditure requirements of Company towards upgradation and expansion of existing
- Investment in Subsidiary, RSHTPL, for financing its capital expenditure requirements.
- Funding working capital requirements of the Company.
- General corporate purposes.
Positives for the Company:
Strong parentage with global leadership, backed by experienced management.
- Company is part of the Foxconn Technology Group, a Fortune 30 group which is the global leader in the EMS business with approximately 22.7% share of global EMS operating revenues in 2020.
- The Foxconn Technology Group has a distinguished track record of delivering growth and shareholder returns, and a long history of executing complex engagements, including being the trusted EMS/ODM partner for global technology leaders such as Apple, Cisco, Dell, Lenovo, Microsoft and Sony, among others.
Largest EMS provider in India by revenue market share, with the size, scale and competencies to pursue substantial growth opportunities in the EMS market.
- Company is the largest EMS provider in India with approximately 15% share of EMS market revenue.
- The Indian market opportunity is driven by the expected increase in electronics usage in the country from the current levels of under-penetration, geographical
diversification by global OEMs of their manufacturing needs to reduce dependence on China, and the availability of government incentives.
- The mobile phone industry accounted for 46% of the EMS addressable market in India in Financial Year 2021, and company is the leading EMS provider to this industry with 23% market revenue share in Financial Year 2021.
Plans to expand into other high growth areas.
- Company’s large-scale manufacturing and assembly capacity, adherence to global quality standards and manufacturing practices and the capability of workforce position company well to expand into new high-growth industries, including mechanics, electric vehicles, televisions, hearables, telecom and networking products, and IT hardware.
- Company plan to move up the value chain and expand the portfolio of service offerings in the areas of product design and development, component manufacturing and sourcing, logistics, and after-sales services.
Plans to acquire new customers.
- Company’s service diversification will enable us to vertically integrate the service portfolio and increase revenues from existing mobile phone customers and actively pursue new customers in the mobile phone industry, and industry diversification will enable company to win new customers in those industries.
- Company’s existing capabilities and the additional ones which company is currently building, aided by favourable market and regulatory tailwinds, will position us as one of the few EMS providers in India that is able to move up the value chain to become a full service ODM provider in the near to medium term.
Availability of Performance Linked Incentives.
- Company expects the business to benefit substantially from the Government of India’s “Aatmanirbhar Bharat Abhiyaan” campaign, which provides an increasing range of incentives to attract and localise manufacturing and production in the country.
- These incentives promote manufacturing and exporting products in various industries, including those that company is targeting for future growth.
- The Company has been approved for a PLI for mobile phone manufacturing which provides a revenue subsidy of 4-6% on the incremental revenue from mobile phones priced at above Rs.15,000.
- The aggregate maximum potential incentive for the Company under this scheme is Rs.6000 crores over the Financial Years 2022 to 2026.
- Company also intend to apply for the electric vehicles (components category) and hearables PLI schemes as and when applications are invited.
Long-term, strategic relationships with industry leading OEM customers.
- Company has established longstanding, strategic and collaborative relationships with key OEM customers. Company is the largest manufacturing and assembly services provider to Xiaomi, which is the leader in the Indian smart phone industry.
Diversifying into Electric vehicles Segment.
- Since March 2021 company has commenced business with market-leading brands in the new industries company is diversifying into.
- These include Ather Energy and Ola Electric (electric vehicles), Vu Technologies Private Limited (“VU”) (televisions), a major global telecom network customer and ZTE Telecom India Private Limited (“ZTE”) (telecom and networking products), and Imagine Marketing Private Limited (“boAt”) (hearables).
Financials of the Company:
|(in Crores)||FY 19||FY 20||FY 21||30th Sept 21|
Valuation of Peer Group Companies:
|Company Name||Face Value||EPS||PE Ratio||RoNW||NAV|
|Bharat FIH Limited||10||0.68||Will be Updated||5.71%||11.91|
|Dixon Technologies Ltd||2||27.49||206.62||21.67%||126.84|
|Amber Enterprises Ltd||10||24.96||131.02||5.19%||490.71|
|Issue Opens on||Coming Soon|
|Issue Closes on:.||Coming Soon|
|Issue Price||Will be Updated|
|Face Value||Will be Updated|
|Retail Category Allocation||Will be Updated|
|Minimum Lot||Will be Updated|
|Minimum Investment||Will be Updated|
|Issue Constitutes||Will be Updated|
|Issue Size||Will be Updated|
|Market Cap||Will be Updated|
|Listing at||NSE & BSE|
|Equity Shares Offered||Will be Updated|
|Equity Shares Prior||Will be Updated|
|Equity Shares after the issue||Will be Updated|
|Finalization of Basis of Allotment||Will be Updated|
|Initiation of Refunds||Will be Updated|
|Credit of Equity Shares:||Will be Updated|
|Listing Date:||Will be Updated|
IPO Valuation Parameters:
|Earnings Per Share (EPS)||Price To Earnings ratio (PE)||Return on Net Worth (RoNW)||Net Asset Value (NAV)|
|0.68||Will be Updated||5.71%||11.91|
|Check IPO Allotment Status:|
KfinTech Website: http://kfintech/IPO/Allotment_Status
BSE IPO Website: https://www.bseindia.com/IPO/Allotment
|Company Contact Info:|
|BHARAT FIH LIMITED
M-2B, DTA Area, SIPCOT Industrial Park
Phase – II Chennai Bangalore NH- 4
Kancheepuram 602 106
Tamil Nadu, India.
Tel: +91 44 67113500;
|IPO Registrar Info:|
|KFin Technologies Private Limited
Selenium, Tower B, Plot No. 31-32
Financial District, Nanakramguda,
Hyderabad, Rangareddi 500 032
Tel: + 91 40 6716 2222