Tata Group In Talks For A Majority Stake In Pegatron’s India Ops

Tata Group is reportedly in the final stages of negotiations with Pegatron to acquire a majority stake in the electronics manufacturer’s India operations.

Sources told Bloomberg that the deal could fructify as soon as May. Post the completion of the transaction, Tata Group will run Pegatron’s operations in India while the Taiwanese major will likely help the company with manufacturing expertise.

As per the report, the deal will encompass an iPhone manufacturing plant near Chennai and another under construction unit. 

This comes a couple of weeks after reports first surfaced that the two were in advanced talks for such a deal. Previous reports said that Tata planned to hold at least a 65% stake in a joint venture (JV) between the two companies.

The latest development also comes five months after Tata acquired another Apple vendor Wistron’s manufacturing facility in Karnataka, marking its entry as one of the suppliers of the tech major.

Pegatron’s existing facility in Chennai employs about 10,000 employees and manufactures 5 Mn iPhones annually. This is expected to give major boost to the Tata Group and help it shore up the production of iPhones in the country. 

The Cupertino-based tech juggernaut has been rapidly scaling up its manufacturing capabilities in India and diversifying its production out of China. This is largely on account of the ongoing geopolitical tensions between Washington DC and Beijing. 

Earlier this month, reports suggested that the Cupertino-based company was considering moving at least half of its existing supply chain from China to India.

However, Apple’s pivot to India is largely led by attractive subsidies offered by the union government under the production-linked-incentive (PLI) scheme. As a result, vendors from Foxconn to Jabil have been making a beeline for India. 

Last week, it was also reported that Apple was in advanced discussions with Murugappa Group and Tata Group-backed watchmaker Titan to assemble and possibly manufacture sub-components for iPhone camera modules.

As a result, iPhone production in the country has soared. In 2023 alone, the company reportedly manufactured iPhones worth INR 1 Lakh Cr in India. Apple also reportedly assembled $14 Bn worth of iPhones in India in fiscal 2024, meaning that about 1 in 7 iPhones are made in India.