Tata Sons increased the authorized equity capital of Tata Electronics to ₹10,000 crore last fiscal year, a fivefold rise. This suggests a fresh investment of more than ₹6,000 crore, as the current paid-up capital stands at ₹3,961 crore. In FY24, Tata Sons invested ₹2,140 crore in Tata Electronics, the highest annual investment since the company’s inception in 2020, according to the latest filings with the Registrar of Companies.
Tata Electronics, the sole Indian manufacturer of Apple’s iPhones, has not provided any reasons for this fundraising. The filings also show that the company had secured loans of ₹6,311 crore as of March 2024.
Latest Ventures and Acquisitions
Tata Electronics is making significant strides in the electronics manufacturing sector. It recently acquired Wistron’s iPhone manufacturing unit in Karnataka. An email to Tata group for comments went unanswered as of Monday. In February, Tata Electronics announced plans to invest ₹91,000 crore in a plant in Gujarat.
Future Plans and Financial Structure
Tata Electronics plans to build a large semiconductor fabrication facility in partnership with PSMC and invest another ₹27,000 crore in a new semiconductor assembly and test facility in Assam. “With its current capital structure of ₹3,900 crore in equity and the rest in debt, Tata Electronics is poised for significant expansion,” said Mohit Yadav, founder of AltInfo, a business intelligence firm. “Their planned ₹91,000 crore chip plant investment far exceeds their current resources, indicating substantial future fundraising.”
A year ago, the authorized capital of Tata Electronics was ₹2,000 crore. Analysts believe a portion of the company’s secured loan may have been repaid.
Financial Performance and Market Competition
In fiscal 2023, Tata Electronics reported revenue of ₹463 crore from manufacturing parts such as mobile phone enclosures but faced a net loss of ₹531 crore. The financial results for FY24 are yet to be filed.
Tata Electronics competes with companies like Dixon, Foxconn, and Pegatron in the electronic manufacturing services sector. The company has stated that its two flagship semiconductor projects are likely to create around 47,000 direct and indirect jobs.
Industry Outlook
By 2030, the global semiconductor industry is expected to grow to $1 trillion, with domestic demand in India projected to exceed $110 billion. India’s entry into semiconductor manufacturing through Tata is expected to significantly reduce global supply chain risks and position the country as a key player in the industry.
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