Taiwanese electronics manufacturer Foxconn has enhanced its financial support for its Indian subsidiary by subscribing to an additional 351.73 million shares through its Singapore-based affiliate, thereby making a further firm commitment to India’s manufacturing sector. This new capital injection of US$37.2 million boosts the shareholding of Foxconn Singapore in Foxconn Hon Hai Technology India Mega Development Private Limited to almost 100 per cent.
Capital injection strengthens India strategy:
As per the filing, the subscription for these shares took place at ₹10 per share after obtaining the board’s nod on 25 June. Following this deal, Foxconn Singapore now owns more than 23.18 billion shares in the Indian company, which constitutes 99.99999996 per cent equity stake. A mere 10 shares still remain with Yuzhan Technology (India) Private Limited.
It is noted that the investment has been done using private funding and can be considered as a long-term investment. It was also pointed out that the transaction is related to the capital increase in the subsidiary rather than the acquisition of shares from a third-party shareholder. No fees were paid by a broker.
Investment consistent with manufacturing growth:
This latest investment happens while Foxconn is still growing its manufacturing base in India where the company has been increasing its production capacities. The company has already turned into one of the biggest electronics manufacturers in the country thanks to the increasing production of iPhones.
Foxconn has been investing in its operations in India repeatedly via its Singapore-based subsidiary. The previous investments were used for the purpose of capacity increase at various manufacturing plants and in accordance with the company’s plan to increase its production outside of China.
As per the regulatory filing, the recent investments in securities represent 3.55 per cent of Hon Hai Precision Industry’s total asset position and 7.72 per cent of equity belonging to the parent firm as per its latest financial report. The deal doesn’t result in any changes in business activities of the company; however, it strengthens the ownership of Foxconn in India.
