Dixon Technologies (India) Limited has executed a joint venture agreement with vivo Mobile India Private Limited (VMI) to incorporate a joint venture company in India to manufacture electronic devices including smartphones as an original equipment manufacturer. The agreement follows the term sheet the two companies signed on December 15, 2024.
VMI received approval from the Government of India on July 8, 2026 under Press Note 3 of 2020 issued by the Department of Promotion of Industry and Internal Trade for incorporation of the joint venture company and subscription of its shares by VMI. Dixon Technologies and VMI also executed a shareholders' agreement to govern their inter-se relationship and the management and operations of the venture.
The share capital of the joint venture company will be held in the proportion of 51:49 by Dixon Technologies and VMI respectively, and neither party will hold any stake in the other. The joint venture agreement provides for initial paid-up share capital of Rs 5 crore to be contributed in the same 51:49 ratio.
The joint venture company will undertake part of VMI's OEM smartphone orders in India and may also engage in OEM business for other brands' electronic products. At closing, the venture will purchase certain manufacturing assets and enter into a manufacturing and packaging agreement with VMI.
Dixon Technologies will hold 51% of the venture for cash consideration and VMI will hold 49% for cash, with the subscription price based on valuation reports under applicable law. The transaction will be a related party transaction on an arm's length basis, and the venture will become a subsidiary of Dixon Technologies after incorporation.
VMI and Dixon Technologies will each nominate two directors to the joint venture's board and hold information and inspection rights. The outer date for completion of the transaction's conditions precedent is one year from execution of the joint venture agreement.
Disclaimer: This article is based on company filings submitted to the Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) and is for informational purposes only. It does not constitute investment advice or a recommendation. Investors should conduct their own research and consult a qualified financial advisor before making investment decisions.