HFCL says that the 5G network rollouts, the rise of FTTH networks, and the expansion of rural broadband will lead to a huge CAPEX by the telecom operators globally.

September 4, 2022

HFCL Ltd.’s board has given its nod to raise around INR 650 crore which will be invested in enhancing R&D facilities, setting up new production facilities to enhance capacity under the Production Linked Incentive (PLI) scheme, and the Design Linked Incentive (DLI) scheme.

The board of directors, has among other things, approved the “raising of funds up to INR 650 crores by way of private placement or preferential issue or public issue or rights issue or qualified institutions placement or through any other permissible mode and/or combination thereof, including by way of issue of equity shares/ preference shares/ bonds/ debentures/ non-convertible debt instruments/ any other securities”, says HFCL in a regulatory filing.

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The domestic telecom equipment maker asserted that the expansion of the 5G network infrastructure, the rise of fibre-to-the-home (FTTH) networks, and increasing rural broadband penetration will pave the way for a huge CAPEX by the telecom operators globally. This will also create massive opportunities for telecom equipment vendors.

“HFCL is fully geared up to capitalise on these opportunities in India and abroad with its successful foray into the export market,” the company said.

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The company further added that the proceeds of the issue shall be utilised towards enhancing the R&D facilities, setting up new production facilities taking advantage of the PLI & DLI scheme, and a higher level of backward integration which will lead to significant improvements in the margins and profitability in the future. In December 2021, HFCL raised INR 600 crores via a Qualified Institutional Placement (QIP) issue.