In light of the poor market conditions, Taiwanese electronics contract manufacturer group Foxconn has pushed back the plan of floating an Initial Public Offering (IPO) for its India subsidiary, Bharat FIH.
In a statement, Foxconn said that a proposed spin-off 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 conducts contract manufacturing for two major smartphone makers, Apple and Xiaomi, in India.
Last year, in December, the company filed papers with the Securities and Exchange Board of India (SEBI) to raise ₹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.
The smartphone industry is struggling with the overall poor macro conditions inundating the market as well as supply chain issues related to semiconductors.
This year, in June, SEBI gave its nod to raise ₹5,000 crore through an IPO. The initial share sale of Bharat FIH comprises a fresh issue of shares worth ₹2,502 crore and an offer for sale (OFS) of up to ₹2,502 crore by promoter group and Foxconn unit Wonderful Stars, according to the Draft Red Herring Prospectus (DRHP).
Meanwhile, the Bharat FIH is likely to rapidly expand its capacities, especially as Apple is seeking to start localising a portion of its supply chain to India as they seek to diversify product