Amber Enterprises is drawing strong interest from private equity and pre-IPO funds for a potential investment in its subsidiary, ILJIN Electronics, with a clear IPO exit path on the table even as it remains open to taking ILJIN public on its own, chairman and CEO Jasbir Singh has told Moneycontrol.
The consumer durables maker and electronics manufacturing services (EMS) group is also awaiting its annual general meeting (AGM) to kick off preparations for a Rs 2,500-crore qualified institutional placement (QIP).
“For fundraising of Rs 2,500 (crore), we have board approval, which is valid for one year. If, in a year, we feel we have a potential opportunity for a good joint venture or acquisition, then you can raise the money,” Singh said.
The funds raised through the two routes will be used to support its expansion plans, including new manufacturing facilities, acquisitions and joint ventures.
“… we are building a full-stack EMS and many private equity funds and pre-IPO funds are in touch with us. That is, if we choose to have fundraiser on the ILJIN level with a clear path to exit through IPO, we can raise funds there also,” Singh said.
Amber Enterprises is also evaluating opportunities for joint ventures or acquisitions in sectors such as defence, aerospace, power electronics, medical electronics and industrial applications.
The company has made eight acquisitions, so far, including the recent 40.24 percent stake in Israel-based Unitronics for over Rs 400 crore.
Moneycontrol reported on July 16 that Amber plans to raise Rs 3,000 crore through two fundraising efforts to support its expansion plans, including Rs 1,500 crore through a qualified institutional placement (QIP) offering of its consumer durables business, Amber Enterprises India, and Rs 1,200–1,500 crore ILJIN IPO.
“We can do both IPO and fundraise through PEs and pre-IPO funds for ILJIN, given their terms are acceptable to us," Singh said.
On acquisitions, the chairman said Amber is focused on building capabilities through both organic and inorganic means. “The sectors we are targeting are high-entry barrier businesses, but are also more margin and sticky businesses. We are looking for small platforms which offer direct synergies, are scalable and have a clean balance sheet,” he said.
He said most defence and aerospace companies are based in countries like the US, Europe, and Israel, and Amber is exploring potential opportunities with firms from these regions.
Focus on PCB play
The company is also betting on the printed circuit board (PCB) market for greater control over supply chain.
“We consume electronics worth $115 billion, which includes $4 billion worth of PCBs. Out of this $4 billion worth of PCBs, only 10 percent of PCBs are being manufactured in India. There is a 90 percent opportunity for import substitution,” he said.
Amber aims to capture 9 percent of the PCB market with the help of the new Electronics Component Manufacturing Scheme (ECMS) and plans to set up India’s largest plant in Jewar, Greater Noida and another facility in Tamil Nadu's Hosur. It has already submitted two applications with ministry of electronics and information technology under ECMS.
“We will invest Rs 990 crore in Hosur through Ascent Circuit subsidiary and Rs 3,200 crore for our bigger plant in Jewar, which will be set up by Ascent K Circuit, which is a JV with Korea Circuit,” he said.
“In Hosur, we will make single-layer, multi-layer and radio frequency type PCBs. In Jewar, it will make high-density interface and semiconductor substrates PCBs. With these two units, Amber aims to become a full-stack PCB manufacturer in India. We will be the first company offering the whole stack for domestic play in India.”
The company has also signed a two-year agreement with Korea Circuit, ensuring steady demand for the PCBs produced by the joint venture.
The top executive said Amber’s companies haven't faced major issues from China's curbs on rare earth material availability, except in its BLDC motors business. “Since it's the off-season for air conditioners, our BLDC segment hasn't been affected. Secondly, we don’t manufacture hearables, where these magnets are typically used — we only make wearables,” he explained.
Export focus
The executive also highlighted that Amber Group is not affected by the ongoing tariff-related developments.
“We are not banking on exports of electronics like ACs... all three sectors we play in are a domestic play. In consumer durables, AC is the least penetrated category. Railways are completely domestic. In electronics, what we are focusing on is domestic. Whatever happens on exports will be totally a total bonus for us.”
Amber, however, has been working in the US market and sees opportunities in other regions like Europe and the Middle East.
“We do small numbers to the Middle East. Slowly, we want to increase focus on exports. AC, components, and motors are for exports. Even for PCB, we want to look at exports, even though we will begin with domestic demand.”
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