Bharat FIH, an Indian subsidiary of Hong Kong-based FIH Mobile Ltd, intends to raise Rs. 50.04 billion through an initial public offering. The offer consists of a new issue of up to Rs. 25.02 billion in shares and an offer for sale of up to Rs. 25.02 billion in shares by the promoter group and Foxconn unit Wonderful Stars. Wonderful Stars currently owns 99.97% of the company. The lead bookrunners for Bharat FIH’s IPO include Citigroup Global Markets India, BNP Paribas, and HSBC Securities & Capital Markets (India).
Bharat FIH is India’s largest Electronic Manufacturing Services (EMS) provider, with around 15% market revenue share and more than double the revenue of the country’s second-largest EMS provider in 2021. Bharat FIH is a division of FIH Mobile Limited (“FIH Mobile”), a significant provider of manufacturing services to the mobile device market. FIH Mobile is a subsidiary of the Foxconn Technology Group, a Fortune 30 company headquartered in Taiwan that is the global leader in the EMS market, accounting for 22.7% of
global EMS operating revenue in 2020. In addition to EMS services, Bharat FIH is developing capabilities to provide Original Equipment Manufacturers (OEMs) with a comprehensive, vertically integrated “one-stop solution” that includes a range of Original Design Manufacturing (ODM) services such as product design and development, component manufacturing and sourcing, logistics, and after-sales services.
It is also the largest mobile phone manufacturing and assembly services supplier to Xiaomi Technology India Private Limited (“Xiaomi”), which leads the Indian smart phone sector with 27% market share by volume in 2021 and 26% market share by volume in the six months ended September 30, 2021, respectively. During the same time period, the company controlled 39% and 50% of Xiaomi’s mobile phone sales by volume, respectively.
The operations are spread across three campuses in the Indian states of Andhra Pradesh and Tamil Nadu, each of which includes manufacturing, warehousing, logistics, and lodging.
Bharat FIH Financial Status
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Revenue | 15854.9 | 26635.6 | 34345.4 |
| EBITDA | 386.9 | 693.3 | -26.9 |
| PAT | 161.9 | 389.7 | -26.9 |
| Total Assets | 8712.1 | 8623.6 | 8899.9 |
| Share Capital | 2380.9 | 2380.9 | 1665.9 |
| Total Borrowings | 0.00 | 0.00 | 1066.2 |
| Net cash generated from / (used in) operating activities | -76.1 | 1101.5 | -532.9 |
| Net cash from / (used in) investing activities | -163.4 | -171.7 | -532.9 |
| Net cash flow from / (used in) financing activities | -45.5 | -408.6 | 1341.7 |
| Net increase (decrease) in cash and cash equivalents | -285.1 | 521.2 | 1341.7 |
Bharat FIH Peer Comparison
| Name of the Company | Total Income (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 | 21.67% |
Bharat FIH IPO Key Points
Strengths
- Largest EMS provider in India by revenue market share, with the size, scale and competencies to pursue substantial growth opportunities in the EMS
- Availability of performance-linked incentives
- Long-term, strategic relationships with industry-leading OEM customers
- Large-scale, high-quality and state-of-the-art manufacturing and assembly capabilities
- In-house capabilities across the ODM value chain, enabling vertical integration
- Resilient, capital-efficient business with stable working capital cycle
Risks
- Largest EMS provider in India by revenue market share, with the size, scale and competencies to pursue substantial growth opportunities in the EMS
- Availability of performance-linked incentives
- Long-term, strategic relationships with industry-leading OEM customers
- Large-scale, high-quality and state-of-the-art manufacturing and assembly capabilities
- In-house capabilities across the ODM value chain, enabling vertical integration
- Resilient, capital-efficient business with stable working capital cycle
Bharat FIH IPO FAQs :
Q1. What is the price band of the Bharat FIH IPO?
Ans. The price band of the Bharat FIH IPO is yet to be announced.
Q2. When does the Bharat FIH IPO open and close?
Ans. The Bharat FIH IPO open ___ and close ___ dates are yet to be announced.
Q3. What is the size of Bharat FIH IPO issue?
Ans. The fresh issue comprises of shares up to Rs.25.02 billion and an offer for sale of shares up to Rs. 25.02 billion.
Q4. What is the allotment date of Bharat FIH?
Ans. The allotment date of Bharat FIH IPO is yet to be announced.
Q5. What is the Bharat FIH listing date?
Ans. The Bharat FIH listing date is yet to be announced.
Q6. What is the minimum lot size and investment required for the Bharat FIH IPO?
Ans. The minimum lot size and investment required for the Bharat FIH IPO is yet to be announced.
Q7. What is the objective of the issue?
Ans. The proceeds 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
Q8. Who are the promoters and key personnels of Bharat FIH?
Ans. Bharat FIH is promoted by Wonderful Stars and FIH Mobile.
Q9. Who are the book runners for Bharat FIH IPO?
Ans. Citigroup Global Markets India, BNP Paribas, HSBC Securities and Capital Markets (India) are the lead managers to the issue.
