The Centre gave its approval to Dixon Technologies Ltd. to execute a joint venture (JV) agreement with Vivo Mobile India (VMI), according to an exchange filing from the company on Thursday.
The joint venture will engage in original equiment manufacturing (OEM) for smartphones. Dixon Tech holds 51% stake in the JV, as per the filing.
"The share capital of the JV Co will be held in the proportion of 51:49 by the company (Dixon Tech) and VMI, respectively," the filing stated.
The development confirms NDTV Profit's newsbreak, as the news channel learnt earlier that the JV plans is set to get approval.
The JV will undertake part of VMI's OEM orders of smartphones in India, and can also engage in OEM business regarding various electronic products of other brands.
The name, size, and turnover of the JV is yet to be announced.
Saurabh Gupta, executive director and Group CFO of Dixon Technologies, had addressed the prolonged anticipation of the Vivo partnership while speaking to NDTV Profit at the end of May.
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"Our understanding with them is that under the JV that will be formed, almost 67% of their volume will be transferred to the JV," Gupta said. "On an annualised basis, we were looking at a volume of closer to 22 million units, with a much better selling price compared to our existing portfolio," he added, when asked about what the JV could mean to the company's prospects.
Share price of Dixon Technologies Ltd. saw a 4.20% uptick to Rs 13,477 at the end of the day's trade, compared to a 0.34% uptick of the NSE Nifty 50.
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