Whalesbook
Bhagwati Products is charting an ambitious course, shifting its focus toward making electronic components rather than just assembling devices. The company is preparing for a large domestic IPO as part of a strategy to grow its market share and leverage India's expanding electronics industry.
IPO Plans and Revenue Goals
Bhagwati Products Limited has begun the process for a significant domestic IPO, aiming to raise over ₹3,000 crore. The company seeks a valuation of more than ₹20,000 crore, reflecting its strong growth plans and expansion into manufacturing key components. This marks a major shift from its previous role, which was primarily assembling products for brands like Vivo and Oppo. Co-founder Rahul Sharma stated that Bhagwati expects to reach ₹15,000 crore in revenue by fiscal year 2026, more than double the approximately ₹6,200 crore earned in the last fiscal year. This growth is expected to come from scaling up production of smartphones, tablets, TWS devices, and storage solutions, as well as its new focus on making parts like displays and mechanical components. The company has hired ICICI Securities, Axis Capital, Kotak Mahindra Capital, IIFL Securities, and Goldman Sachs to manage the IPO. Draft filings are expected with SEBI in three to four months, with the IPO potentially launching in FY27.
Comparing Valuation to Rivals
Bhagwati Products' targeted valuation is comparable to established domestic electronics manufacturing service (EMS) companies. Rivals such as Amber Enterprises India Ltd and Dixon Technologies (India) Ltd have seen their stock prices climb 14.70% and 7.93% respectively in the past month, partly due to India's Production Linked Incentive (PLI) scheme. As of April 2026, Dixon Technologies has a market value of about ₹40,000 crore with a P/E ratio around 55x. Amber Enterprises is valued at roughly ₹25,000 crore with a P/E near 35x. With a projected FY26 revenue of ₹15,000 crore and a valuation of ₹20,000-25,000 crore, Bhagwati's forward revenue multiple is estimated at 1.3x to 1.7x. This is competitive for the fast-growing EMS sector. However, investors will closely examine its profitability and margins compared to established peers who benefit from the PLI scheme.
JV Structure Presents Risks
Bhagwati Products is a joint venture between Indian promoters Micromax Informatics and China's Huaqin Technologies, which joined in 2024. This structure offers access to global manufacturing expertise and sourcing but also brings risks. These include potential geopolitical tensions and regulatory changes affecting investments from China. India's Press Note 3, which deals with investments from countries bordering India, has been updated, indicating possible shifts in economic relations, and trade disputes could re-emerge. Additionally, rapidly expanding into component making requires substantial investment and faces operational challenges like quality control and supply chain management. Bhagwati will compete against domestic firms like Dixon and Amber, which have longer track records and deeper ties to India's manufacturing sector, bolstered by the PLI scheme. Any issues managing these complexities could harm its finances and market standing.
Market Outlook and IPO Hurdles
India's electronics manufacturing services (EMS) sector is expected to grow further, supported by government programs such as the PLI scheme, the 'Make in India' initiative, and global efforts to diversify supply chains. Analysts generally view companies benefiting from these trends positively. If Bhagwati Products successfully executes its shift to component manufacturing, it could greatly improve its market appeal and profit margins. However, the IPO's success will depend on overall market conditions, Bhagwati's ability to show consistent profitability, and its skill in managing competitive pressures and geopolitical factors.