Shares of Dixon Technologies surged nearly 3% to reach an all-time high of Rs 18,438 during early trade on December 16. The rise came after the company announced a binding agreement with Vivo India to establish a new manufacturing joint venture.
As part of the agreement, Dixon will hold a 51% majority stake, while Vivo India, a subsidiary of the global smartphone leader Vivo, will own the remaining 49%. The venture will focus on original equipment manufacturing (OEM) of smartphones and other electronic devices. It will take up a portion of Vivo’s smartphone production in India and could potentially extend to manufacturing for other brands.
This comes after months of scrutiny of Chinese smartphone makers in India, with several companies, including Vivo, accused of tax evasion and money laundering. The deal nevertheless aligns with Vivo’s strategy to strengthen its local manufacturing capabilities in India.
Shares of Dixon were trading at Rs 18,376.65 at 09:26 am on the NSE. The stock has given stellar performance in 2024 so far with a gain of over 175% year-to-date.
Atul B. Lall, Dixon’s Vice Chairman and Managing Director, said in a statement, “This association will further bolster our manufacturing excellence and Vivo’s leadership in the Indian business ecosystem. Together, we aim to make a more robust and future-proof organisation.”. Meanwhile, Jerome Chen, CEO of Vivo India, also sounded enthusiastic and optimistic in highlighting the potential of the partnership. “This will complement Vivo’s manufacturing in India, while leveraging the expertise of Dixon in professional manufacturing,” he said.
The partnership is expected to enhance Dixon’s presence in the Android smartphone market and contribute to India’s push for localized manufacturing.
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Source: Moneycontrol
News Desk
