Reliance arm and Sanmina complete deal to set up electronics JV, to focus on 4G and 5G hardware –

Reliance‘s arm RSBVL and US-based Sanmina Corporation have completed the joint venture transaction that will focus on making 4G and 5G hardware for Indian and overseas markets.

The JV has been set up at a total enterprise valuation of about Rs 3,300 crore. The manufacturing will take place at Sanmina’s 100-acre campus in Chennai.

Reliance Strategic Business Ventures Limited (RSBVL) will hold 50.1 per cent equity stake in the joint venture while Sanmina will have 49.9 per cent shareholding.

RSBVL will achieve this ownership primarily through an investment of up to Rs 1,670 crore in new shares in Sanmina’s existing Indian entity. With the investment, the entity will become a joint venture and will be capitalised with over USD 200 million of cash to fund growth.

“Sanmina Corporation, a leading integrated manufacturing solutions company and Reliance Strategic Business Ventures Limited (RSBVL), a wholly-owned subsidiary of Reliance Industries Limited (RIL), India‘s largest private sector company, today announced they have completed the previously announced joint venture transaction,” a joint statement by the two companies said on Tuesday.

RSBVL had a revenue of Rs 1,478.1 crore (USD 194.9 million) and a net profit of Rs 179.8 crore for the year ended March 2022. It had a total investment of Rs 10,857.7 crore at the end of March 2022, the statement said.

The joint venture will leverage Sanmina’s 40 years of advanced manufacturing experience and Reliance’s expertise and leadership in the Indian business ecosystem. The day-to-day business will continue to be managed by Sanmina’s management team in Chennai.

“The joint venture will create a world-class electronic manufacturing hub in India. The joint venture will prioritise high technology infrastructure hardware, for growth markets, and across industries such as communications networking (5G, cloud infrastructure, hyperscale datacentres), medical and healthcare systems, industrial and cleantech, and defence and aerospace,” the statement said.

In addition to supporting Sanmina’s current customer base, the joint venture will create a ‘Manufacturing Technology Centre of Excellence’ that will serve as an incubation centre to support the product development and hardware start-up ecosystem in India as well as promote research and innovation of leading-edge technologies.

(With inputs from PTI)