Dixon Tech Gets Govt Approval for JV with Longcheer Intelligence
Indian electronics manufacturing major Dixon Technologies Ltd. has received approval from the Indian government to set up a joint venture with China’s Longcheer Intelligence Pte. Ltd., according to an exchange filing on Thursday.
The nod for the JV was issued by the Ministry of Electronics and Information Technology under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, the filing stated.
Details of the Joint Venture
Under the proposed JV, 74% of the stake will be owned by Dixon Tech, whereas the remainder 26% will be held by Longcheer. The JV company will carry on the business of manufacture and supply of smartphones, tablets, true wireless stereo, smart watch, AI PC, automotive electronics, and healthcare devices.
This collaboration introduces several key advancements, particularly in Original Design Manufacturer (ODM) expertise, which will allow Dixon to gain ODM capabilities in mobile phones and other electronics products for domestic and export markets.
The JV will also bring in advanced product design expertise, allowing Dixon to go beyond assembly and develop in-house capabilities for smartphones, IoT devices, and other consumer electronics.
Additionally, it will facilitate the localisation of non-semiconductor sub-component manufacturing, including precision mechanics, which are currently imported. The venture will also strengthen software-hardware integration, ensuring that both design and product development take place in India.
Impact on Indian Electronics Sector
The approval of this joint venture is likely to have a positive impact on India’s electronics manufacturing sector, which has been facing challenges due to high import dependence and lack of local design and manufacturing capabilities.
The partnership will not only bring in advanced technology and design expertise but also create job opportunities and boost the local economy.
In the near term, the JV is expected to benefit Dixon Tech, which will gain access to Longcheer’s expertise and global supply chain. In the long term, the partnership has the potential to create a self-sustaining electronics ecosystem in India, making it a significant player in the global electronics market.
Stock Market Reaction
Shares of Dixon Tech closed 1.29% higher at Rs 16,767.8 apiece on the BSE, compared to 0.66% decline in the benchmark Sensex.
The stock has been trading in an uptrend over the past few weeks, driven by strong earnings growth and positive sentiment in the IT and electronics sectors.
The JV announcement is likely to have a positive impact on Dixon Tech’s stock price, as it will provide a boost to the company’s growth prospects and increase investor confidence.
