HFCL LIMITED

HFCL Ltd was incorporated as a Public Limited Company on May 11, 1987 as Himachal Futuristic Communications Limited. Later on, Company's name was changed to 'HFCL Limited' effective from 15th May, 2019. The Company is a diverse telecom infrastructure enabler with active interest spanning telecom infrastructure development, system integration, and manufacture and supply of high-end telecom equipment and Optic Fiber Cable (OFC). Their manufacturing facilities are located at Solan in Himachal Pradesh, Salcete in Goa and New Delhi. The company started with manufacturing transmission Equipment and soon expanded their product portfolio to manufacture Access Equipment, Optical Fibre Cable, Accessories and Terminal Equipment. The company is geared up for meeting the new generation access network demand in future. Promoted by Mahendra Nahata, the Company entered into a technical collaboration agreement with Seiscor Technologies Inc, USA, for the manufacture of 1+1 and 1+7 Analog Subscriber Carrier Systems and signed a Memorandum of Undertaking with Philips Kommunikation Industries AG of Germany for the manufacture of the Digital Subscriber Carrier System. In the year 1991, the company promoted two new companies namely, Himachal Telematics Ltd, at Solan for the manufacture of digital microwave radio transmission equipments and fax machines and Microwave Communication Ltd, for establishing radio paging network in certain important cities of the country. During the year 1993-94, the company acquired existing investment companies know as Kaldev Trader & Investment Ltd, which was changed to HFCL-Trade-Invest Ltd and Coubndge Construction (Delhi) Ltd. Also, they entered into agreements with telecom giants namely, Kong Song Communication & Electronics Co Ltd, Korea to manufacture radio pagers and satellite video receivers, Dalcons Corporation of Korea for managing credit card information services and Wireless Telecom Ltd of USA to implement V-sat services. During the year 1995-96, Himachal Telematics Ltd was merged with the company. In the year 1997, the company bagged a contract to set up an information super highway for the basic telephone project of Essar Commvision Ltd in Punjab circle. During the year 1996-97, the company's Optical Fibre Cable Plant in Goa commenced their commercial production. In the year 1998, the company entered the information technology business by offering software solutions to the telecom industry. During the year 1998-99, the company has received Purchase Orders worth Rs 22 crore for the supply of STM-1 Optical Line Terminal Equipment and advance Purchase Order of another Rs 100 crore for STM-16 Systems. In the year 1999, the company forayed into software exports and developed a state-of-the-art facility at Delhi for that purpose. They bagged a contract from Reliance WorldTel for setting up Internet backbone in Tamil Nadu. During the year 1999-2000, the company entered a strategic tie-up with the Kerry Packer Group of Australia and formed two joint ventures namely, Consolidated Futuristic Solutions Ltd and Excel Netcommerce Ltd in the field of Software and B2B E-commerce respectively. HFCL Infotel Ltd and Consolidated Futuristic Solutions Ltd became the subsidiaries of the company during the year 2000-01. During the year 2001-02, the company acquired 74% of equity of HTL Ltd, a public sector undertaking, which is the largest switching equipment maker in the country for Rs 55 crore. HTL Ltd became the subsidiary of the company with effect from October 16, 2001. Also, the company divested part of their shareholdings in Consolidated Futuristic Solutions Ltd, consequently Consolidated Futuristic Solutions Ltd ceased to be subsidiary of the company with effect from December 6, 2001. During the year 2002-03, the wholly owned subsidiary company, namely HFCL Trade-Invest Ltd merged with the company with effect from March 31, 2003. HFCL Infotel Ltd merged with the Investment Trust of India Ltd, a Chennai based company and was renamed as HFCL Infotel Ltd with effect from September 1, 2002. Also, Rajam Finance and Investments (India) Ltd, which was renamed, as The Investment Trust of India Ltd became the subsidiary of the company by virtue of their subsidiary relationship with HFCL Infotel Ltd. The Investment Trust of India Ltd ceased to be the subsidiary of the Company with effect from September 30, 2003. During the year 2003-04, the cable division of the company entered into Cable TV market and they emerged as a dominant player in that segment. Also, they received the order valuing of about Rs 220 from MTNL. During the year 2004-05, the company completed the biggest ever order of 200 K Lines of WLL CorDect and 60% of CDMA Infrastructure order of MTNL. Moneta Finance (P) Ltd has become the wholly owned subsidiary of the company with effect from July 11, 2006. During the year ended 31 March 2014, HFCL successfully bid and won certain contracts to supply its products as well as services. HFCL voluntarily sought the delisting of its GDRs from London Stock Exchange and Luxembourg Stock Exchange. The GDRs listing have been cancelled from London Stock Exchange and Luxembourg Stock Exchange w.e.f. 21 March 2014 and 23 December 2013 respectively consequent upon resignation by the Depository i.e. Bank of New York (BNY Mellon). HFCL has not appointed any Successor Depository and has terminated the Deposit Agreement due to lack of liquidity with virtually no trading taking place and investors' decreasing interest in depositary receipts. During the year ended 31 March 2015, HFCL accelerated its performance in both of its manufacturing and turnkey business segments. In manufacturing of OFC, the company achieved record revenue and profits coupled with full capacity utilisation of the facility in Goa. Exports of OFC was another breakthrough during FY 2015. Equipment manufacturing saw production of GSM products. In turnkey projects execution, HFCL has successfully completed high capacity optical transport network for Railtel by deploying 80 channel DWDM system at over 60 sites, along two connecting routes between Delhi - Mumbai. The project is under annual maintenance contract and based on excellent execution, the customer has gone ahead with 75% expansion order on the company. Another success was the winning of a turnkey contract for laying OFC network in one of the largest states of the country from BSNL. Further, the company was awarded large project for setting up of GSM network at extremely remote standalone sites and connecting each site to the national network.M/s HFCL Advance Systems Private Limited became the wholly owned subsidiary of the company w.e.f. 23rd February, 2015. HFCL achieved its highest ever revenue of Rs 2570 crore in financial year ended 31 March 2016. It performed well on all the business verticals. The company has also established itself as a global supplier of OFC products with exports to over 25 countries in FY 2016 (16 countries in FY 2015). HFCL achieved highest ever export revenue of Rs 75.27 Crore in FY 2016 (Rs 34.88 Crore in FY 2015) despite tough market competition from local as well as foreign competitors. In telecom equipment manufacturing, HFCL in FY 2016 started manufacturing low capacity GSM system for rural deployment which has large business potential in India for next 2-3 years. The company during FY 2015 and FY 2016 participated in four large tenders aggregating to approx. Rs 5,000 Crore floated by BSNL for setting up of countrywide Defence Telecom network. The company has already received an advance order of Rs 1,245 Crore in one tender and the techno-commercial evaluation of one more tender valued at approx. Rs 2,500 Crore has been completed. The company has stood as lowest bidder in that tender also. HFCL's debts were earlier restructured under Corporate Debt Restructuring (CDR) mechanism and as stipulated therein, the lenders had the right to claim recompense from the company at the time of its exit from CDR on account of various sacrifices & waivers made by them in the CDR Package. With the improved financial performance, the company submitted its proposal for exit from CDR mechanism to Monitoring Institution (MI) i.e. IDBI Bank Limited. The MI has recommended recompense amount of Rs 148.47 Crore on term and working capital loans. The same has been approved by CDR - Empowered Group vide their order dated 22 March 2016 subject to the approval from company's lenders. Subsequent to CDR-EG's approval, the recompense amount has been approved by some of the lenders and approval from remaining lenders is expected soon. Accordingly, the Board of Directors of HFCL at their meeting held on 10 May 2016 approved the recompense amount of Rs 148.47 Crore to exit from CDR mechanism. HFCL acquired 1,60,000 equity shares of Polixel Security Systems Private Limited (Polixel), thereby the total equity holding of the company reached upto 94% and Polixel became the subsidiary of the company w.e.f 9 August 2016. The company further acquired additional 10,856 equity shares of the Polixel, thereby the total equity holding of the company in Polixel has reached to 100% and accordingly Polixel has become the wholly owned subsidiary of the company w.e.f. 31 March 2017. During the year ended 31 March 2017, HFCL's Goa plant underwent a wholesome modernisation. The annual capacity also was raised from 5 MFkm to 7.2 MFkm, adding some new cable variants in the process. The year also marked the first full year of operations for the recently commissioned Chennai facility of HTL, a subsidiary company. Consequently, the capacity of Spiral Wire Armoured cable was doubled and the annual capacity for traditional Armoured Cables was raised from 3 MFkm to 4.5 MFkm. Moving up the value chain, the company also added FTTH cable in its Chennai facility during the year. In Turnkey business, HFCL accomplished a challenging feat of developing and commissioning a GSM network in Left Wing Extremist (LWE) region. The mammoth exercise involved the deployment of more than 500 sites across 6 states. The company also won a Wifi network turnkey project worth Rs.200 crore from BSNL for roll out of Wifi services across 16 states in the Northern and Eastern India. In order to increase its network's backhaul capacity, BSNL Mobile Network floated two separate tenders for microwave backhaul radios. HFCL bagged both these tenders involving supply, commissioning and maintenance of about 10,000 radios to be deployed across India. The order value is Rs.180 crore.The company made significant progress in new business verticals of Railways, Smart Cities and Defence during the year. In Railways business vertical, the company bagged certain orders for a variety of railway signalling linked applications during the year. The company signed two contracts totalling Rs.113 crore to execute Trenching & Laying of Signalling Cables and also for Design, Manufacture, Supply, Installation, Testing, Commissioning and incidental services of telecommunication System for the Bhaupur-Khurja section of the Eastern Dedicated Freight Corridor covering route length of 343 km as a sub-contractor to Alstom Systems India Pvt. Ltd. In another success, the company signed a contract worth Rs.95 crore with Larsen & Toubro Limited for Design, Manufacture, Supply, FAT, Installation, Testing & Commissioning, Training and DLP at site of the Telecommunication System comprising of various sub-systems viz. OFC, SDH, Data Networking, Dispatch Telephone, EPABX, Master Clock System and Power Supply for STP-17 of the Western Dedicated Freight Corridor Phase 2. In Smart Cities business vertical, HFCL bagged two projects in FY 2017 one for Ludhiana Smart Surveillance & Intelligent Traffic Management Systems and the other for Jaipur regarding Provisioning & Integration of Wi Fi Hotspots, Interactive Information Kiosks, Surveillance Cameras, Environmental Sensors, Structural Sensors, Smart Lighting Solutions and Remote Kiosks along with the Facility Management Services. In Defence Business vertical, HFCL signed an MOU with a French MNC, as its Technology Partner, for Portable Opto Electronics during the year for manufacturing wide range of Portable Night Vision Devices. During the year, the company submitted RFIs for Weapon Night Sights for various weapons, Electronic Fuses for Artillery Ammunition, Manufacture of Mini UAVs. During the year ended 31 March 2018, HFCL issued and allotted 4,50,00,000 Warrants convertible into equity shares on preferential basis at a price of Rs16/- per warrant to Promoters/Promoter Group of the companies and Non Promoter persons/entity. The Warrant holders have already paid 25% of the issue price and balance 75% of the issue price shall be paid at the time of exercising of Warrants. The Warrants shall be exercised within a period of 18 months from the date of their allotment i.e. 30th October, 2017 in one or more tranches. During FY 2018, HFCL's Goa plant developed new compact designs for micro optical fibre cables with lesser diameters and new dry-dry optical fibre cables. These new variants are extremely popular in FTTx networks. Many product certifications were received including CPR (Construction Products Regulations) for different product variants. The CPR Certification demands stringent product performance in the event of fire and is mandatory now for supplies to European countries. The Chennai plant of HFCL's subsidiary, HTL Limited got several product & process approvals including TL-9000 certification. HTL Limited also implemented SAP ERP system in order to have better monitoring & control on manufacturing activities. New machines were added for manufacturing of Steel Wire Armored Cables which is popular in many European countries. Also, various alterations and renovations were carried out in the overall infrastructure to enhance efficiency and productivity of HTL Limited's manufacturing plant at Chennai. Consistent efforts to have better control on value chain culminated in addition of FRP and GFR manufacturing facilities at the Chennai premises of HTL Limited.In FY2018, HFCL secured a 3-year contract from Nokia for supply of optical fibre cables for Digital Poland Project funded by EU. During the year under review, against the Advance Purchase Order worth Rs1,245 crore approx (including AMC of Rs298 crore), the company has received a Purchase Order worth Rs 935 crore approx from BSNL for DWDM equipment to be installed on pan India basis for the Defence Forces under Network for Spectrum Program (NFS). In Smart Cities business vertical, HFCL has received Letter of Intent from RajComp Info Services Ltd (RISL) for supply, Installation and Commissioning of edge networking equipment under surveillance and Incident response project in the state of Rajasthan. During the year 2019, the Company redeemed entire 60,37,500, CRPS of Rs 100/- each, amounting to Rs 60.38 crores. The Company had 1,00,00,000 Warrants outstanding as on 31st March, 2019, which have also been converted into equal nos. of 1,00,00,000 equity shares and the Paid-up Equity Share Capital of the Company stands at Rs 128.44 Crores comprising of 1,28,43,77,194 equity shares of face value of Rs 1/- each. The Company acquired controlling stake of 90% in Raddef Private Limited, thereby making it a subsidiary of the Company, w.e.f. 15th May 2019. In FY 2019, the Company has given Corporate Guarantees to Corning Finolex Optical Private Ltd. on behalf of HTL Ltd., a Subsidiary of the Company for the supply of material; Punjab National Bank on behalf of Exicom Tele - System Ltd., for Working Capital. Further, Owens Corning India Private Ltd. on behalf of HTL Ltd., a Subsidiary of the Company for the supply of material and Yes Bank Ltd on behalf of HTL Ltd., a Subsidiary of the Company for various credit facilities sanctioned to HTL Ltd. During the year 2019, production capacity in Chennai Plant in subsidiary was increased from 3.5m fkm to 7m fkm, thus making overall capacity of 15m fkm. During the current fiscal year, the Chennai Plant's capacity has reached to 10.5m fkm, which has taken its consolidated OFC capacity to 18.5m fkm. With an intension to offer more value to own telecom turnkey vertical and other customers by offering all passive products, Chennai Plant started its OFC Accessories Division and received various product approvals from Government and non- Government Customers. The subsidiary company has received orders to the tune of Rs 90.82 crore for such new products. In FY 2018-19, the Company started a Greenfield project for manufacturing of Optical Fiber with 6.4m fkm capacity in Hyderabad. Besides, it developed, marketed and sold its products to more than 50 countries worldwide. During the year 2019-20, the Company had mutually terminated the Joint Venture Agreement which was entered with DragonWave Inc. (now known as DragonWave-X Canada Inc.) and the Company on October 18, 2010 and acquired the balance stake of 50.10% equity shares held in DHIPL, from DragonWave Pte. Ltd., Singapore thereby making DHIPL, a wholly-owned subsidiary of the Company, effective from December 17, 2019. It launched its first in-house designed Wi-Fi and Unlicensed Band Radio product range, which saw great success in its debut year of commercial shipments. During the year 2020, Company acquired a majority stake in Raddef Private Limited, making it an HFCL subsidiary. It executed two separate share purchase agreements, with Nivetti Systems Private Limited and another with BigCat Wireless Private Limited. It undertook various line balancing and debottlenecking measures at its Goa plant and Chennai facilities. The unit at Goa upgraded its ribbon OFC manufacturing infrastructure to over 2000 Fiber count cables during the year. The Goa Plant also received ISO 22001 for the Information Technology Service Management system and an ISO 27001 for Information Security Management systems. In its Chennai plant of HTL Limited, a subsidiary company, HFCL expanded its capacity from 7m FKM to 10.5m FKM. It achieved a further reduction in cable diameters by using special raw materials and innovative processes in OFC manufacturing. It started commercial production of manufacturing optical fiber unit at Hyderabad from 23rd of January, 2020. It commissioned the turnkey solution project for Bharat Broadband Network under BharatNet Phase-II in Punjab. It launched next-gen WiFi Technology product and established an R&D Centre for specialized radio frequency (RF) and Microwave Systems, Surveillance Radar, Sensor Systems, Antenna etc. in Bangalore. It executed the carried forward orders of Eastern and Western Dedicated Freight Corridors, which are expected to become operational by the year 2022. As on 31st March, 2020, Company had 6 subsidiaries. It launched its first in-house designed, developed and manufactured Wi-Fi and Unlicensed Band Radio product range in 2019. As of March 31, 2021, 157 5G commercial networks in 62 markets have been launched globally. On January 15, 2021, India and Japan signed an MoU to enhance cooperation in the field of Information and Communications Technologies. During the year 2020-21, the Company commenced production of optical fiber cables for Fiber-to-the-Home (FTTH) applications from its Hyderabad Facility. A new product line of highly flexible micro module cables was also developed for cables up to 576F counts. It completed international certifications and technical trials with a number of customers for new and more advanced Wi-Fi 6 Indoor and Outdoor products. It set up a model PM-Wani Village in Baslambi (Haryana), to offer high speed broadband connectivity to the unconnected. As on March 31, 2021, the Company had six subsidiaries. In FY21, the Company shipped over 150K units of Wi-Fi and UBR products to select large customers in India. During the year 2022, the Company completed the laying of optical fibre cable in Jharkhand under BharatNet Project, where a total of 7,765 kilometers of cable network has been laid down to connect 1,789 gram panchayats through the GPON network. It started shipping new generation Wi-Fi 6 products. It increased customer based in India and also started shipping to Africa. It started shipping PoE and non-PoE L2 switches to customers. It launched more variants in UBR product line to cater to a larger customer segment. It brought out a full end-to-end connectivity solution for rural markets. Product line was expanded to 18 product models under Wi-Fi and 6 models under UBR category. It formed strategic partnerships to drive product development, integrating capacities and accelerating growth from industrial collaborations. In 2023, the Company launched 5G Lab-as-a-service, unlicensed band radios, switches and the world's first open-source WiFi 7 access point to offer an automated test environment to the private sector, government and academia to work on 5G solutions and services. It established 3 R&D centres in Bengaluru, Gurugram and Hyderabad; commissioned a facility for the manufacture of wire harnesses (automotive and aerospace) and polymer compounds at HTL Limited, a subsidiary. Further, it expanded the optical fiber cable capacities from 18.5 million fkm to 25.08 million fkm. It commissioned optical fiber Phase-II capacity.