HFCL Limited announced that its overseas wholly owned subsidiary has signed a significant five-year supply agreement for high-quality Optical Fiber Cables (OFC). The total potential value is approximately USD 1.10 billion (equivalent to ₹10,159 crores). This marks a historic milestone for the company, establishing its first long-term, multi-year OFC supply arrangement with a major global multinational corporation.
Historic Long-Term Supply Agreement Secured
HFCL Limited has entered into a crucial five-year supply agreement with a global multinational corporation for the provision of high-quality, high-fibre-count Optical Fiber Cables (OFC). This deal is executed through the Company’s overseas wholly owned subsidiary.
The estimated total potential value of this contract over its tenure is substantial, calculated at approximately ~USD 1.10 billion (equivalent to ~₹10,159 crores). The valuation is based on the prevailing selling prices for the OFC products supplied under the agreement.
This engagement represents a significant milestone for HFCL, as it is the first time the Company has secured a multi-year, long-term OFC supply arrangement of this magnitude.
Key Contract Details
The details of the contract are as follows:
- Contracting Entity: The order is awarded by a global multinational corporation. The supply will be directed to the assignees and authorized affiliates of the customer.
- Nature of Order: The contract involves the Supply of Optical Fiber Cables, tailored to specific customer requirements. This is classified as an International agreement.
- Contract Duration: The execution period runs up to December 2030.
Supply Commitment and Terms
The agreement mandates specific volume commitments:
- A minimum quantity of multi-million fiber kilometres (fkm) of high-quality, high-fibre-count OFC must be supplied in each Calendar Year (CY) starting from CY26 to CY28. This period will automatically extend for two additional years, covering CY29 and CY30.
- Purchase orders will be released periodically based on project-wise and specification-wise requirements throughout the contract term.
- Under the terms, the wholly owned subsidiary executing the contract is also eligible to supply OFC to the customer’s assignees and authorized affiliates.
Strategic Significance
Given the limited number of manufacturers globally possessing the required technology depth, precision manufacturing, and scale for such complex OFC products, this engagement is viewed strategically. It is expected to materially strengthen the Company’s competitive positioning and reinforce its long-term growth outlook within the global OFC market.
The announcement confirms that the promoter/promoter group has No interest in the awarding entity, and the contract does not fall within related party transactions.
Source: BSE
