About Saharsa Electronic Solutions Limited

Saharsa Electronic Solutions is engaged in the business of providing solutions towards electronics system design and manufacturing (“ESDM”) services at its manufacturing plant Noida, Uttar Pradesh, which is equipped with four high speed SMT lines. They provide product and solutions right from printed circuit board (“PCB”) assembly, Box Build, LED lighting. Memory, IT accessories, computer and IT hardware. Additionally, we have also installed quality inspection machines such as high speed PWB inspection, PWB Visual inspection and X-Ray inspection machines to ensure the high standards of product quality. Their manufacturing facility is staffed with a workforce of approximately 160 employees, as of March 31, 2024 which includes a team of around 35 engineers dedicated to enhancing their operational efficiency. They have made export of over 80% of their products and solutions during the FY 2024 to certain global manufacturers located in countries like United States of America, Rwanda, Tunisia, United Kingdom, Germany, Canada, Austria & Belgium.

Their current product portfolio may be categorized as follows: 

1. Printed circuit board assemblies (“PCBA”): Their PCBAs are used in products manufactured in the automotive, medical, industrial, IT and consumer products industries, and shall include box-build products such as laptop and tablets; 
2. LED Lighting solutions, which include LED Chip – the source of the lightning, power supply or the driver, printed circuit board for LED’s, housing or the frame. 
3. Memory product which includes -DRAM modules, Solid State Drives (SSD), USB flash storage device etc. 
4. IT hardware which includes -Motherboard, laptop, Computer, Tablets, and other accessories.

INDUSTRY SCENARIO
The electronics industry is one of the largest and fastest growing industries in the world. Electronic products continue to impact and shape our lifestyle prominently in today’s digital era. With the world being more connected than ever and the digital push induced by COVID-19 pandemic; the demand for electronic devices is expected to grow steadily and continue to be a major economic driver across the globe. The global electronics industry is estimated at US$ 2.9 trillion in 2020. For comparison, the global value of electronics industry is almost equal to the economy size of India, which currently stands at US$ 2.9 trillion.

On an overall basis, electronics manufacturing had grown from US$37.1 billion in 2015-16 to US$ 67.3 billion in 2020-21. However, COVID-19 related disruptions impacted the growth trajectory in 2020-21 and led to a decline in the manufacturing output to US$67.3 billion.

The National Policy on Electronics (NPE) 2019 set a target of achieving a turnover of US$ 400 billion by 2025. However, the COVID-19 pandemic brought with it unforeseen and unprecedented challenges. In light of this, the NPE 2019 targets for electronics production in 2025-26 at US$ 300 billion appears to be more realistic considering the disruption on account of COVID-19 in the past 18 months which has been aggravated with the new variants of the COVID-19 virus such as the Omicron. In keeping with the targets envisioned in the NPE 2019, there have been numerous consultations and deliberations between industry, industry bodies and the Government to reach at the above revised target for the electronics sector

Technology is the key driver of all industries and influences all spheres of our lives. Accordingly, India continues to strive to emerge as a leader in the segment by capturing a sizable pie of the electronics manufacturing ecosystem that propels the technology sector. For India to be the global electronics manufacturing hub of the future, there needs to be a clear long-term vision which must be achieved by means of the short-term goals. In order to become a US$ 5 trillion economy by 2025-26, (or 2027-28 considering allowance for the two year loss on account of the pandemic), India shall strive to be a US$1 trillion digital economy given its omnipresence across all spectrums of life. Moreover, a special emphasis shall be laid on exports to achieve this objective.

The long-term vision may be covered primarily under four broad categories: 

i. Make in India for the world 
ii. Make India the No. 1 electronics manufacturer and exporter. 
iii. Become a significant player in the global value chain. 
iv. Build ecosystem comprising of primarily mobile phones, IT hardware, and consumer electronics of US$ 1 trillion+ in the next 10 years.

Till 2011, India was a major manufacturing and export hub for mobile phones. However, the pace of exports reduced significantly post shutdown of Nokia’s manufacturing facility in 2014. Domestic manufacturing also suffered tremendously14. Imports grew and India’s mobile industry became largely import dependent15. To push electronics manufacturing in general and mobile manufacturing in particular, the Government in consultation with the industry resorted to Phased Manufacturing Policy (PMP) in 2017. This was aimed at a duty-based import substitution effort that would largely depend upon imposing duties in a phased manner. It was an attempt to start generating domestic manufacturing primarily for domestic use. The exports were negligible16.

Five years later in 2022, the approach and the entire strategy of the Government has undergone a change - from PMP (import substitution) to the Production Linked incentive (PLI) approach aimed at transforming India into a global hub for mobile and electronics manufacturing. This would bring competitiveness, scale and exports at the centre of the policy focus, replacing the earlier import substitution objectives and supportive policies. 

This shift is evident as below: 
• NPE 2019 envisages strengthening India’s linkages with global trade, integration with global value chains and build policies and incentive framework to boost exports. The policy aims to transform India into a destination for manufacturing and exports. 

• Hon’ble Prime Minister in his address on August 6 2021 to the Heads of Indian Missions abroad also made a clarion call to focus on export led policies from India for increasing India’s share in global value chains. In particular, he cited the example of mobile manufacturing and exports. 

• The Ministry of Commerce and Industry is undertaking a major restructuring exercise to support India’s outlook towards exports and Free Trade Agreements (FTAs). The trade policy is exploring half a dozen new bilateral FTAs with UAE, UK, Australia, Canada and EU in 2022. It has also launched a revitalised India-US Trade Policy Forum in November 2021. 

In summary, there has been a complete shift in strategy which goes beyond the vision of import substitution to “Make in India for the World”. This fresh outlook as noted above is aimed at transforming India’s manufacturing process by focusing on competitiveness, scale and exports. Furthermore, continuing on the path of import substitution, India’s domestic electronics market is estimated to reach at best US$ 150-180 billion from the current US$65 billion over the next 4-5 years17. Thus, exports of US$ 120-140 billion is critical to reach the US$300 billion mark for electronics manufacturing. This in turn is key for the US$5 trillion economy, US$1 trillion digital economy and the US$1 trillion export target envisaged by the Ministry of Electronics and Information Technology (MeitY) and the Ministry of Commerce and Industry respectively. Moreover, given the shorter timeframe wherein electronics manufacturing has to nearly quadruple from present US$67 billion to US$300 billion by 2025-26, it is imperative that specific product segments with high potential for scale are shortlisted and catered to by way of incentives and policy measures. Such products segments cover mainly mobile phones, Information Technology hardware (‘IT hardware’), consumer electronics, wearables and hearables, LED lighting, electronic components in electric vehicles etc. and have been elaborated in the ensuing sections of this document.

SAHARSA ELECTRONIC SOLUTIONS LIMITED COMPETITIVE STRENGTHS
1. Dedicated solutions for ESDM services.
2. Established relationships with customers
3. Established manufacturing capabilities
4. Quality Assurance
5. Experienced Promoters, management and operating team

SAHARSA ELECTRONIC SOLUTIONS LIMITED STRATEGIES
1. Diversification of their product range
2. Pursue inorganic growth through acquisitions
3. Increase their geographical reach and expand their customer base
4. Invest in expanding their technological capabilities and manufacturing capacities

SAHARSA ELECTRONIC SOLUTIONS LIMITED RISK FACTORS & CONCERNS
1. They are significantly dependent on revenue from sale of PCBA.
2. The company has been recently incorporated and has taken-over the running business of M/s Sahasra Electronic Solutions, thus they have limited operating history as a Company which may make it difficult for investors to evaluate their historical performance or future prospects.
3. They derive a majority portion of their revenues from exports and are subject to risk of international trade.
4. Their Subsidiary Sahasra Semiconductor Private Limited is engaged in the business of semiconductor chips manufacturing which exposes them to certain risks.
5. They are planning to expand their operations of Elcina Electronics Manufacturing Cluster, Industrial Area Salarpur, Bhiwadi, Rajasthan so they may face business or financial challenges which may adversely affect their profitability and results of operations.
6. The Company may not be successful in penetrating new export markets.
7. Excessive dependence on Citi Bank in respect of Loan facilities obtained by the Company.