16 Dec , 2024 By : Debdeep Gupta
Shares of Dixon Technologies surged close to 3 percent and hit a record high of Rs 18,438 in early trade on December 16 after the company signed a binding term sheet for setting up a new manufacturing joint venture with Vivo India.
Under the agreement, Dixon will hold a majority 51 percent stake in the joint venture, while Vivo India, a subsidiary of global smartphone giant Vivo, will own the remaining 49 percent. The joint venture will undertake the original equipment manufacturing (OEM) business of electronic devices, including smartphones. The facility will undertake part of Vivo's OEM orders of smartphones in India, and can also engage in OEM business of various electronic products of other brands.
on April 8 about Vivo’s talks with India contract manufacturers including Dixon. The joint venture between the two companies comes amidst increased scrutiny of all major Chinese smartphone companies in India, which face allegations ranging from customs duty and income tax evasion to money laundering.
At 09.26 am, shares of Dixon Technologies were trading at Rs 18,376.65 on the NSE. The stock has been on a bull run in 2024 so far, clocking in over 175 percent gains year-to-date.
"We believe that this association will bolster our manufacturing excellence and superior execution abilities and Vivo’s leadership in the Indian business ecosystem. We are excited to work together to create a stronger, more diversified, and future-proof organization," Atul B. Lall, Vice Chairman and Managing Director of Dixon said in an exchange filing.
The Vivo partnership will help Dixon strengthen its foothold in the Android smartphone ecosystem in India. “There is immense potential to further build on shared capabilities together in the future to deliver sustainable growth for the proposed venture,” said Lall.
“We are delighted to sign a term sheet with Dixon, which boasts rich localized management experience and outstanding professional manufacturing prowess. The proposed joint venture will handle part of Vivo's OEM (Original Equipment Manufacturer) smartphone orders in India and may also engage in OEM business for various electronic products of other brands. This partnership will effectively complement the current manufacturing operations of Vivo India,” Jerome Chen, CEO of Vivo India said.
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