MUMBAI : Taiwanese mobile phone maker Foxconn’s Indian unit Bharat FIH Ltd filed draft papers for a proposed public listing in India to raise as much as Rs5,003.8 crore on Wednesday.

The proposed initial share sale aims to raise Rs2,501.9 crore of fresh capital. In addition, a Foxconn unit holding shares of Bharat FIH will divest a portion of its stake to raise an equal amount.

The fresh capital will be used to upgrade and expand facilities, invest in a subsidiary to finance capital expenditure needs, fund working capital requirements, and for other corporate purposes, according to the draft prospectus filed with the Securities and Exchange Board of India.

India has had a record year for initial public offerings (IPOs), with the strong trading debuts of large IPOs such as Nykaa and Zomato feeding into the enthusiasm for such share sales. This has encouraged more firms to tap the public markets to raise funds.

The maker of Xiaomi brand of mobile phones claims to be the largest electronics manufacturing services provider in India, with about 15% revenue market share in the financial year ended 31 March, and more than twice the revenue of the second-largest EMS provider in the country, it said citing a Frost & Sullivan report, in its draft prospectus. It did not name the second-largest EMS provider. EMS refers to companies that make electronic components and assemblies for original equipment manufacturers.

Foxconn has three facilities in India across Andhra Pradesh and Tamil Nadu.

“We are the largest mobile phone manufacturing and assembly services provider to Xiaomi Technology India Pvt. Ltd, which is the leader in the Indian smartphone industry with 27% and 26% market share by volume in the financial year 2021 and the six months ended 30 September. In those periods, we had a 39% and 50% share of Xiaomi’s mobile phone sales by volume," it said.

Foxconn said since March this year, it has been expanding its India business into industries other than mobile phones, with a focus on high-growth industries that benefit from market tailwinds such as mechanics, electric vehicles, televisions and hearables.

“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 incentives to encourage manufacturing in India. Our 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," it said.

The company said that given the significant under-penetration and growing per capita usage of these products, the country’s total addressable EMS market is expected to grow to $135 billion by the financial year 2026, with an average annual growth of 30.3% in the five years.

During the financial years 2019, 2020 and 2021, the Foxconn unit recorded revenues of Rs34,345 crore, Rs26,636 crore and Rs15,855 crore, respectively.

“Our business experienced revenue contraction on account of market factors affecting the mobile phone industry and our OEM customers, as well as the effects of the covid-19 pandemic. Despite the challenges affecting our business and industry, we generated revenue from operations of Rs10,155.79 crore in the six months ended 30 September 2021, compared to Rs6,394.57 crore in the six months ended 30 September 2020," the company said.

For the six months ended 30 September, the company recorded a net profit of Rs89.17 crore, a tad higher than Rs88.18 crore in the same period last year.

Investment banks Kotak Mahindra Capital, Citigroup, BNP Paribas, and HSBC will advise Bharat FIH on the initial share sale.