Dixon Technologies (India) Limited has executed definitive agreements to form a joint venture with vivo Mobile India Private Limited (VMI). This is a continuation of the term sheet intimation made to stock exchanges on December 15, 2024.

Agreements Executed

The Company has executed two agreements with VMI:

  • A Joint Venture Agreement (JVA) to incorporate a joint venture company (JV Co.) in India for OEM business of electronic devices including smartphones
  • A Shareholders' Agreement to govern inter-se shareholder relationship and management rights in the JV Co.

Government Approval

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 JV Co and subscription of shares by VMI.

Shareholding Structure

The JV Co will have shareholding proportion of 51% by Dixon Technologies and 49% by VMI. Neither company will have any stake in each other.

Financial Details

The JVA provides for initial paid-up share capital of INR 5 crore to be contributed in proportion of 51:49 by Dixon Technologies and VMI respectively. No consideration has been exchanged between parties as the JV Co is yet to be incorporated.

Business Scope

The JV Co will carry on business as original equipment manufacturer (OEM) of electronic devices including smartphones. It will undertake part of VMI's OEM orders of smartphones in India and can also engage in OEM business of various electronic products of other brands.

Significant Terms and Conditions

The JVA provides for:

  • Company to hold 51% stake and VMI to hold 49% stake for cash consideration
  • JV Co will procure valuation reports in accordance with applicable law
  • At closing, JV Co will purchase certain manufacturing assets and enter into manufacturing and packaging agreement with VMI
  • Customary conditions regarding representations, warranties, indemnities, termination and dispute resolution

Related Party Transaction Status

Post-incorporation, JV Co will become a subsidiary of Dixon Technologies as per Companies Act, 2013. The transaction will fall within related party transactions but will be carried out on arm's length basis with relevant valuation reports. Promoter/promoter group/group companies have no interest in the JV Co except through Dixon's shareholding.

Rationale and Expected Benefits

This association will bolster the Company's manufacturing excellence and superior execution abilities. The partnership will further strengthen the Company's foothold in the android smartphone ecosystem in India in line with Dixon's strategic goals.

Conditions Precedent

The transaction is subject to satisfactory completion of conditions precedent as set out in the JVA and receipt of applicable statutory and regulatory approvals (if any).

Shareholders' Agreement Details

The Shareholders' Agreement provides for:

  • VMI and Company each having right to nominate 2 directors each on the board of JV Co
  • Information and inspection rights for both parties
  • Customary provisions regarding reserved matters, pre-emptive rights, transfer restrictions, representation, warranties, and dispute resolution