Reliance Industries and US-based Sanmina Corporation on Thursday said they would set up an electronic manufacturing joint venture in India that will focus on hi-tech infrastructure hardware across diverse sectors, including communications networking, defense and aerospace.
Reliance Strategic Business Ventures Limited (RSBVL) will hold a 50.1 per cent stake in the joint venture while $7-billion Sanmina will have a 49.9 per cent stake.
RSBVL will invest up to Rs 1,670 crore in new shares in Sanmina’s existing Indian entity, according to a statement. With the investment, the joint venture will be capitalised with over $200 million of cash to fund growth.
The transaction, which is subject to regulatory approvals, is expected to close by September 2022.
The day-to-day business will continue to be managed by Sanmina's existing management team in Chennai.
The joint venture aims to create a “world-class electronic manufacturing hub in India”.
The entire manufacturing will initially take place at Sanmina's 100-acre campus in Chennai.
Besides supporting Sanmina’s customer base, the joint venture will create a "Manufacturing Technology Center of Excellence" that will serve as an incubation center.
to support the product development and hardware start-up ecosystem in India, as well as promote research and innovation of leading technologies.
Revenues for Sanmina SCI India Private Ltd, the existing Indian entity, were nearly Rs 1,230 crore (or $165 million) for the fiscal year ended March 31, 2021.
The entire manufacturing will initially take place at Sanmina's 100-acre campus in Chennai.
“We are excited to partner with Reliance to build the premier integrated manufacturing solutions company in India,” Jure Sola, chairman and chief executive Officer of Sanmina, said.
This joint venture will service both domestic and export markets, he said.