Micromax-linked Bhagwati Products has initiated IPO preparations, targeting a valuation exceeding ₹20,000 crore. The electronics manufacturer, which scaled revenue from ₹620 crore to over ₹6,200 crore in one year, plans to raise funds for its shift from simple assembly to design-led component manufacturing. Investors are tracking its upcoming DRHP filing for insights into its margin profile and reliance on its joint venture with China's Huaqin Technology.
What Happened
Bhagwati Products Limited, a key player in India’s electronics manufacturing ecosystem, has officially kicked off preparations for an Initial Public Offering (IPO). The company, which operates as a strategic joint venture between Micromax Informatics and China’s Huaqin Technology, is reportedly aiming to raise over ₹3,000 crore through the issue. This move comes on the back of rapid operational scaling, with the company targeting a valuation in excess of ₹20,000 crore. To manage the IPO process, the company has appointed a consortium of leading investment banks, including ICICI Securities, Axis Capital, Kotak Mahindra Capital, IIFL Securities, and Goldman Sachs.
Scaling and Growth Trajectory
The company has reported a sharp financial turnaround. Driven by its joint venture with Huaqin, which acquired a 49% stake, Bhagwati Products saw its revenue jump from approximately ₹620 crore in FY24 to ₹6,200 crore in FY25. Management has set an ambitious revenue target of ₹15,000 crore for FY26. This exponential growth is underpinned by the company's established manufacturing footprint, which includes a flagship 1.5 million square-foot facility in Greater Noida, alongside units in Hyderabad, Bhiwadi, and Rudrapur. Currently, the company produces around 2 million smartphones per month and is diversifying its portfolio to include tablets, TWS devices, storage solutions, and IT hardware.
Strategic Shift: Assembly to ODM
Bhagwati Products is transitioning from being a contract manufacturer—largely assembling devices for brands like Vivo and Oppo—to an Original Design Manufacturer (ODM). This strategy involves heavy investment in research, design, and local component production. The company is actively setting up capabilities to manufacture critical electronic components, such as display modules and mechanical parts, aiming to increase domestic value addition. This shift is designed to reduce dependency on external supply chains and tap into government-led production incentive schemes, including the electronics component manufacturing subsidy programs.
Why Investors Are Watching
The upcoming IPO represents a significant attempt by homegrown electronics players to capitalize on India’s growing position as a global manufacturing hub. However, the company’s business model carries specific monitorables. A critical aspect for potential investors will be understanding the extent of Bhagwati Products' dependency on its Chinese partner, Huaqin, for both product design and customer relationships. While the JV has been a primary catalyst for the recent 10x growth, navigating the regulatory environment regarding cross-border joint ventures remains a key consideration for long-term sustainability.
Risks and Market Context
As the company moves toward its public debut, several business risks stand out. The electronics manufacturing services (EMS) sector is highly competitive, characterized by thin profit margins. The company's ability to maintain its growth momentum while expanding into new, complex segments like automotive electronics and IT hardware will be a test of its execution capabilities. Furthermore, although the company is scaling, it is still maturing from a low base, making profit stability and cash flow management critical areas for scrutiny once the Draft Red Herring Prospectus (DRHP) is available.
What Investors Should Track Next
The next major milestone is the filing of the Draft Red Herring Prospectus (DRHP), which will likely occur in the coming 3–4 months. Investors should monitor this document for details on actual profit margins, debt levels, specific use of IPO proceeds, and further clarity on the operational control and technology transfer terms within its partnership with Huaqin. Market timing and the company's ability to sustain its high-growth pace in FY27 will be essential for gauging its valuation relative to its peers in the EMS sector.