Dixon Tech Shares Jump Over 4% As It Announces JV Deal with Vivo Mobile India

Mumbai, July 10: Dixon Technologies’ shares jumped up to 4.11% intraday to Rs 13,562.00 on BSE, Friday, extending gains after Dixon Technologies (India) Limited announced a joint venture with Vivo Mobile India Private Limited (VMI) to strengthen its smartphone contract manufacturing business. 

The stock bounced up by Rs 219.00 from its previous closing price at Rs 12,934.00 and hit a high of Rs 13,600.00 and an intra-day low of Rs 13,153.00. Trading was held at Rs 13,481.95 as the volume weighted average price. The counter was trading at Rs 13,477.00, Rs 543.00 or 4.20% higher than its previous closing price. 

Buying and Selling Pressure: Intraday selling pressure was witnessed on Dixon’s shares as throughout the trading session till 11:56 am, 70.94% of shares on the offer side as compared to buying interest of 29.06% on the bid side. The sell-side volume stood at 1,04,814 shares while the buy-side volume was 42,945 shares. In absolute terms, the sell-side bias was around 2.5:1 despite the share price moving up. 

Dixon’s share price weekly snapshot 

As seen from the chart above, the stock price recovered back to around Rs 13,000 on July 08 following which saw a gap up opening on July 09 and closed near Rs 13,500. It further climbed up on July 10 trading session. 

Deal Details 

Dixon Technologies has signed a joint venture agreement with Vivo Mobile India (“VMI”) for the incorporation of a company in India to operate as an original equipment manufacturer (“OEM”) of electronic devices, including smartphones. Dixon shall hold 51% stake in the proposed joint venture and VMI shall hold the remaining 49% stake. Neither party holds stake in each other’s business. 

The joint venture will be capitalised by way of an initial paid- up share capital of Rs 5 crore in the ratio of 51: 49. The joint venture company shall undertake a portion of VMI’s OEM orders for smartphones to be fulfilled in India, and may undertake contract manufacturing engagements for other electronic brands.  

On incorporation, the joint venture company shall be a subsidiary of Dixon as per the provisions of the Companies Act 2013 (“Act”) and both parties may nominate two directors on the Board of directors of the joint venture and shall also have information and inspection rights in accordance with the Act. The joint venture shall complete all conditions precedent under the joint venture agreement within one year from the date of execution, which may be extended by mutual agreement in writing. 

“The joint venture would strengthen our manufacturing capabilities and deepen our relationship with one of the existing smartphone brands in India, thus enabling us to further deepen our penetration in the Android smartphone ecosystem,” Dixon said. 

“The Company already has several OEM relationships and this association will further strengthen our existing electronics manufacturing services portfolio,” it added. 

Source

• https://www.nseindia.com/get-quote/equity/DIXON/Dixon-Technologies-(India)-Limited