Dixon Floats New Arm To Manufacture IT Hardware Components

SUMMARY

While the new subsidiary was incorporated on September 28, the subscription money for Dixon Teletech was paid by the parent on November 4

In a filing with the BSE, the company said that the new subsidiary will “manufacture and deal” in IT hardware components, products, and equipment

So far, Dixon has already signed contracts with four top laptop brands – HP, Lenovo, Acer, and Asus – to make their IT hardware products in the country

Homegrown electronics manufacturer Dixon Technologies on Monday (November 4) notified the incorporation of a wholly-owned subsidiary, Dixon Teletech, to manufacture IT hardware components.

While the new subsidiary was incorporated on September 28, the subscription money for Dixon Teletech was paid by the parent on Monday.

In a filing with the BSE, the company said that the new subsidiary will “manufacture and deal” in IT hardware components, products, and equipment.

“The wholly owned subsidiary has been incorporated with an object to undertake manufacturing and dealing in, inter-alia, all kind(s) of information technology (IT) products including IT hardware components, related products, equipment and components thereof,” read the filing.

Dixon Technologies added that it subscribed to 10,000 equity shares of the new arm at a face value of INR 10 each (at par) for a cash consideration of INR 1 Lakh.

The development comes at a time when the contract manufacturer has reportedly set its eyes on establishing multiple facilities to ramp up the assembling of laptops to capitalise on the Centre’s production-linked-incentive (PLI) 2.0 scheme for IT hardware products.

So far, Dixon has signed contracts with as many as four top laptop brands, including HP, Lenovo, Acer, and Asus, to make IT hardware products in the country. Dixon is also said to be eyeing a revenue of INR 3,500 Cr from its IT hardware business by the next fiscal year 2025-26 (FY26) and INR 48,000 Cr over the next six years.

The company has emerged as a big local player in the electronics manufacturing space on account of consistently achieving its PLI targets and receiving incentives and subsidies from the government, especially for manufacturing smartphones. It already manufactures smartphones for Samsung, Motorola, Xiaomi, and Jio.

The push for Dixon comes at a time when global IT hardware giants are rushing to build their manufacturing units in India as the Centre’s existing import authorisation regime for personal computers, laptops, tablets and servers is expected to come to an end by the end of December 2024.

While no detailed guidelines have been issued so far, importers will be mandated to apply for fresh authorisations starting January 1, 2025.

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