The share price of the Indian multinational electronics manufacturing services company Dixon Technologies is seeing significant gains this week.
Early in the trading session on Tuesday, Dixon’s stock price surged as high as ₹10,530, up by 7.41% from the previous close of ₹9,804. Dixon is also up by 4.15% over the past five trading days. At the time of writing, the stock is trading for ₹10,255.
Joint Venture with HKC Overseas
Dixon’s stock surges as the electronic goods manufacturer and seller secures approval from the Ministry of Electronics and Information Technology (MeitY) to establish a joint venture with HKC Overseas Ltd.
HKC Overseas is an affiliate of the China-originated HKC Corporation Limited, which specializes in semiconductor display technologies and is one of world’s top three leading manufacturers of large-size LCD panels.
Dixon Display Technologies Private Limited
In August last year, Dixon Technologies signed a share subscription and shareholder’s agreement with HKC Overseas Ltd, which provides that HKC Overseas will hold a 26% stake and Dixon Technologies will hold a 74% stake in Dixon Display Technologies Private Limited (DDTPL), which is currently a wholly-owned subsidiary of Dixon Technologies.
MeitY has now approved the joint venture arrangement.
“The Company has received approval from the Ministry of Electronics and Information Technology, Government of India (“MEITY”) today under Press Note 3 read with the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, for investment by HKO in DDTPL pursuant to the Proposed Transaction,” says Dixon Technologies in a in a notice to stock exchanges dated March 9.
“Pursuant to the PN3 Approval and upon consummation of the Proposed Transaction, which is subject to other conditions precedent set out in the SSHA: (i) DDTPL (presently a wholly owned subsidiary of the Company) shall become a joint venture company, and its shares shall be jointly held by the Company and HKO in the proportion of 74:26.”
Joint Venture to Develop and Sell Display Technologies
The partnership will develop, produce and distribute LCD modules and thin-film transistor liquid crystal display (TFT-LCD) modules along with other display technologies that will be used in products such as smartphones, laptops, automotive displays, televisions and computer monitors.