Contract manufacturer Dixon Technologies plans to hit the capital markets in the first week of September for raising nearly Rs 700 crore through a public offer, which will make the Noida-based company the first Indian mobile phone producer to be listed since the launch of the ‘Make in India’ programme.
The company, which makes consumer electronics, home appliances, washing machines, mobile phones and lighting products for a number of brands including Panasonic, Phillips, Intex and Gionee, will channel the funds towards setting up a new plant for LED televisions and LED bulbs at Tirupati, paying off debt and getting into new businesses.
Sunil Vachani, chairman and managing director, Dixon notified that the company will get into backward integration for LED televisions with capacity of 1million a year, and LED lighting with capacity of 5 million a month including tubelights at the Tirupati plant, which will be used for exports.
Tirupati will be the company’s seventh plant after three facilities each in Noida in Uttar Pradesh and Dehradun in Uttarakhand. The company, which got an approval from the Securities Exchange Board of India (Sebi) earlier this month, will raise fresh equity of Rs 60 crore through the offer.
The company, which also refurbishes mobile phones including iPhones through a partner, closed the year ended March 2017 with a revenue of Rs 2,400 crore, maintaining a growth of 25 percent CAGR.
Despite the slowdown in the Indian smartphone market’s growth in 2016 and this year, the company said contract manufacturing of phones will continue to rise, as several Indian and Chinese brands that are making their own phones may want to shift some capacities so as to benefit from established supply chains and lower cost in a highly competitive market. Players like Foxconn, Flextronics and Dixon are investing in India for mobile handsets manufacturing and enhancing value addition.
By Baishakhi Dutta
