Dip in Xiaomi orders hit Foxconn's Bharat FIH, affect operations, IPO plans

According to a source aware of the development, the unit stopped its level 10 operations on June 30, and some of its operations are being shifted to Sriperumbudur near Chennai

Foxconn group's Bharat FIH is in the process of winding up its operations at Sri City in Andhra Pradesh due to decline in orders from a major consumer, Xiaomi.

According to a source privy to the development, Bharat FIH stopped its level-10 operations on June 30 and is now shifting some other operations to Sriperumbudur near Chennai. This has affected the company's plans to come out with a Rs 5,000-crore initial public offering (IPO).

“IPO plans are already shelved. While level-five and -six operations deal with mechanics and board assembly, level-10 handles finishing job of mobile phones," said another source.

 

Bharat FIH, formerly known as Rising Stars Mobile India, was established in 2015 at Sri City. It expanded operations to Sunguvarchatram and Sriperumbudur in 2017. The company is involved in the manufacturing of mobile phones, EVs, televisions, hearables, and more.

The company had not responded to questions from Business Standard till the time of going to the press.

Bharat FIH’s Sriperumbudur unit is mainly focussed on assembly, testing, marking and packaging operations for specific segments. According to media reports, the company recently witnessed the exit of three independent directors — InterGlobe Aviation chairman Venkataramani Sumantran, Sify Technologies cofounder Ramaraj R, and former IT and telecom secretary Aruna Sundararajan.

"The company was over-dependent on Xiaomi and Nokia and did not diversify based on the trend. Moreover, the Foxconn group is too much focussed on Apple's manufacturing," the source said. Since the unit value of its devices is less than Rs 15,000, the company did not qualify for the production-linked incentive (PLI) scheme.

Last year, Bharat FIH had said that it will be investing around Rs 400 crore in its subsidiary Rising Stars Hi-Tech. Bharat FIH, a subsidiary of FIH Mobiles and a Foxconn Technology Group company, was also looking to come up with an IPO last year. Drop in business has now derailed the IPO plan, which included an initial share-sale of Bharat FIH comprising fresh issue of shares worth Rs 2,502 crore and an offer for sale of up to Rs 2,502 crore by promoter group and Foxconn unit Wonderful Stars.

In a short span of time, the company expanded its capabilities to manufacturing of casings, mechanics and components, PCBA (printed circuit board assembly) and final assembly of mobile devices. Bharat FIH had over 25,000 employees post-Covid, of whom 90 per cent are women.

Interestingly, in January 2024, Josh Foulger, the country head of Bharat FIH, was the first one to exit the company after serving nine years. Foulger was instrumental in the expansion of Bharat FIH in India and he also played a key role in the rise of its customer Xiaomi Corp.