Foxconn delays India unit Bharat FIH's IPO plan due to current market conditions

Source: Reuters

Hong Kong-listed Foxconn Technology Group on October 20 said that the company's plan for floating Rs 5,000 crore Initial Public Offering (IPO) for the India unit Bharat FIH on Indian stock exchanges --BSE and NSE-- has been delayed in light of the market conditions.

In a statement, Foxconn said that a proposed spinoff would be pursued when conditions improve, without mentioning any revised timeline.

It also added that shareholders and potential investors of the company should note that the proposed spin-off is "subject to, among other things, the approvals from the relevant regulators in India, market conditions and other factors and accordingly, there is no assurance that the proposed spin-off will take place or as to when it may take place."

Bharat FIH is a subsidiary of FIH Mobiles and a Foxconn Technology Group company. It makes devices for Xiaomi and Nokia.

In December 2021, Moneycontrol had reported that the company had filed papers with the Securities and Exchange Board of India (Sebi) to raise around Rs 5,000 crore via an IPO.

Kotak Mahindra Capital, Citi, BNP Paribas and HSBC Securities are the Investment bankers working on the IPO. Shardul Amarchand Mangaldas and S&R Associates are the legal advisors.

Later, in June this year, Sebi gave a go-ahead to raise the aforesaid amount through IPO. The initial share sale of Bharat FIH comprises a fresh issue of shares worth Rs 2,502 crore and an offer for sale (OFS) of up to Rs 2,502 crore by promoter group and Foxconn unit Wonderful Stars, according to the Draft Red Herring Prospectus (DRHP).

At present, Wonderful Stars holds a 99.97 percent stake in the company. Bharat FIH, formerly Rising Stars Mobile India, is India's largest Electronic Manufacturing Services (EMS) provider, with approximately 15 percent market revenue share in the financial year 2021.