Tata Sons seeks up to $1 billion funding for phone plant in Tamil Nadu | Economic Times

Mumbai: Tata Sons is seeking up to $1 billion in overseas loans to set up a globally scalable mobile phone and component contract manufacturing plant in Tamil Nadu that will start by making iPhone parts, said people aware of the plan.This is part of group chairman N Chandrasekaran’s bid to woo mobile makers such as Apple to alternative production sites in India as they seek to diversify out of China, they said. 79557747Tata Electronics, a wholly owned subsidiary of Tata Sons, will lead the initiative, beginning with iPhone casings and eventually partnering other original equipment manufacturers (OEMs) in South Korea and Japan as part of a “larger electronics ecosystem,” said one of the persons. The partnership with Apple will be part of Prime Minister Narendra Modi’s Make in India push and will take advantage of the government’s production-linked incentive (PLI) scheme that was unveiled in August.Tata and Apple didn’t respond to ET’s queries. $1.5b Capex Plan for ProjectTata Group is looking at a total capital expenditure of $1.5 billion for the priority project through a combination of internal accruals and borrowings, said the people cited above.Toward this end, it’s seeking $750 million-1 billion in external commercial borrowings (ECB), they said.“This offers high growth potential for the group provided the execution is done well and by roping in top management with expertise in this area,” said a group director. “The group is identifying the right CEO to head this venture and also roping in directors from GE.”The Tata Group and Apple are keeping details of their plan under wraps. Group insiders said Tata Electronics is keen to kick off the project by announcing the Apple partnership to showcase its capabilities.Samsung and three major contract manufacturing partners of Apple – Foxconn, Wistron and Pegatron – are among the 16 firms that have signed up for India’s $6.65 billion PLI scheme aimed at boosting domestic smartphone production over the next five years.Tamil Nadu has unveiled its own Electronics Hardware Manufacturing Policy 2020 targeted at increasing output to $100 billion by 2025 or a fourth of total electronic exports by that year. Tata Electronics has already been allotted 500 acres by the Tamil Nadu Industrial Development Corp. (Tidco) in Hosur.