Honor Tech: Honor Tech eyes IPO in four years, says MD Madhav Sheth
Smartphone brand Honor Tech, which licences products from China, plans to go public with an initial public offering (IPO) in the next four years to expand its manufacturing operations and retail presence in India, a top official said.
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“IPO, for me…is not just about the topline, but also the bottom line because without being profitable, we cannot just get into the financial markets,” Honor Tech managing director Madhav Sheth told ET.
The company, which launched its second smartphone in the country on Thursday, has already achieved profitability in trading its products in the market, but is yet to achieve operational profitability, he said.
“From a contribution margin perspective, we are breaking even,” Sheth said. “On the gross side, too, we are even, but on the net side, we still have some way to go.”
In a bid to chase profits, he is now more focused on the belly of the market with a budget smartphone that he claims will be a cut above the rest in terms of durability.
Like with its first handset, the latest model is also being imported from Honor Tech’s Chinese suppliers. The advanced technologies in the handset cannot be manufactured in India yet, Sheth reasoned.
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“We had to import completely boxed units of this product, but it has been subsidised from the factory itself to ensure we are matching the market aspirations in terms of pricing, with a focus to make this the most competitive product in its segment” he said.Sheth said the company is in talks with PLI-eligible local manufacturers to make Honor phones in India from the next fiscal. However, he wants to make sure the quality of the products is not compromised.
“There are specific machines that are required to make these phones at their current quality, which come from Japan, and Honor has been using them in China. We have to get these capabilities in India over a period of time,” he said.
Sheth said Honor Tech plans deeper discussions with local manufacturers about such capabilities, and that is a reason why the company’s local manufacturing plans have not yet solidified.
Honor Tech was spun off as an independent entity in August 2023 from PSAV Global that earlier had the licence to sell Honor products in India. The Indian entity is working under a licensing deal with Chinese brand Honor (an earlier subsidiary of Huawei) where it has the rights to sell and manufacture the products in India without any royalty involved.
Commenting on the industry trends for 2024, Sheth said 4G smartphone demand is set to die this year, with competition brands now looking to reuse components from their 4G devices to build affordable 5G handsets, pushing the price down to under Rs 10,000. However, current expectation of a spike in memory chip prices may force brands to hike prices by up to Rs 1,000 on future models, he added.
Smartphone brand Honor Tech, which licences products from China, plans to go public with an initial public offering (IPO) in the next four years to expand its manufacturing operations and retail presence in India, a top official said.
![]()
“IPO, for me…is not just about the topline, but also the bottom line because without being profitable, we cannot just get into the financial markets,” Honor Tech managing director Madhav Sheth told ET.
The company, which launched its second smartphone in the country on Thursday, has already achieved profitability in trading its products in the market, but is yet to achieve operational profitability, he said.
“From a contribution margin perspective, we are breaking even,” Sheth said. “On the gross side, too, we are even, but on the net side, we still have some way to go.”
In a bid to chase profits, he is now more focused on the belly of the market with a budget smartphone that he claims will be a cut above the rest in terms of durability.
Like with its first handset, the latest model is also being imported from Honor Tech’s Chinese suppliers. The advanced technologies in the handset cannot be manufactured in India yet, Sheth reasoned.
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“We had to import completely boxed units of this product, but it has been subsidised from the factory itself to ensure we are matching the market aspirations in terms of pricing, with a focus to make this the most competitive product in its segment” he said.Sheth said the company is in talks with PLI-eligible local manufacturers to make Honor phones in India from the next fiscal. However, he wants to make sure the quality of the products is not compromised.
“There are specific machines that are required to make these phones at their current quality, which come from Japan, and Honor has been using them in China. We have to get these capabilities in India over a period of time,” he said.
Sheth said Honor Tech plans deeper discussions with local manufacturers about such capabilities, and that is a reason why the company’s local manufacturing plans have not yet solidified.
Honor Tech was spun off as an independent entity in August 2023 from PSAV Global that earlier had the licence to sell Honor products in India. The Indian entity is working under a licensing deal with Chinese brand Honor (an earlier subsidiary of Huawei) where it has the rights to sell and manufacture the products in India without any royalty involved.
Commenting on the industry trends for 2024, Sheth said 4G smartphone demand is set to die this year, with competition brands now looking to reuse components from their 4G devices to build affordable 5G handsets, pushing the price down to under Rs 10,000. However, current expectation of a spike in memory chip prices may force brands to hike prices by up to Rs 1,000 on future models, he added.
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