Dixon Technologies , a leading electronic manufacturing services company, has announced a significant move to strengthen its position in the electronics manufacturing ecosystem. The company has entered into a share subscription and purchase agreement to acquire a 51% stake in Kunshan Q Tech Microelectronics (India) Private Limited for a total consideration of approximately ₹553.00 crores.

Transaction Details

The acquisition involves two components:

1. Share Purchase: Dixon will buy 16,150,943 equity shares from the current owners, Q Technology (Singapore) Private Limited and Kunshan Q Technology International Limited, for ₹428.00 crores.
2. Share Subscription: Dixon will subscribe to 4,716,981 new equity shares for ₹125.00 crores.

About Kunshan Q Tech Microelectronics

Kunshan Q Tech Microelectronics (India) Private Limited specializes in manufacturing camera and fingerprint modules for mobile handsets, IoT systems, and automotive applications. The company reported a turnover of ₹1,977.21 crores in FY 2024-25.

Strategic Implications

This acquisition is expected to bring several benefits to Dixon Technologies:

1. Enhanced Manufacturing Capabilities: The deal will boost Dixon's manufacturing excellence in mobile handsets, IoT devices, and automotive applications.
2. Backward Integration: It will strengthen Dixon's backward integration plans within India's electronics manufacturing ecosystem.
3. Technological Synergies: The acquisition is anticipated to accelerate technology transfer and enable faster go-to-market solutions.

Joint Venture Structure

Upon completion of the transaction, Dixon Technologies will hold a 51% stake in Kunshan Q Tech Microelectronics, while Q Tech Singapore will retain the remaining 49%, forming a joint venture.

Regulatory Approvals and Timeline

The acquisition is subject to regulatory approvals and other conditions precedent. The companies expect to complete the transaction within 90 days of the agreement execution, subject to fulfillment of these conditions.

Financial Snapshot of Kunshan Q Tech Microelectronics

This strategic move aligns with Dixon Technologies' long-term vision to be a leading enabler in India's electronics manufacturing ecosystem. The company anticipates that this acquisition will unlock significant synergies and contribute to its growth in the rapidly evolving electronics sector.

Dixon Technologies (India) Limited, a leading electronic manufacturing services company, has taken a significant financial step by issuing a corporate guarantee to its wholly owned subsidiary, Padget Electronics Private Limited (PEPL). The guarantee, valued at up to USD 50 million, is described as back-to-back, continuing, and irrevocable.

Key Details of the Corporate Guarantee

Financial Implications

According to the company's disclosure, the immediate financial impact on Dixon Technologies is limited. The guarantee amount will be recorded as a contingent liability in Dixon's financial books. This accounting treatment reflects the potential financial obligation without affecting the company's current financial position.

Regulatory Compliance

The company has made this disclosure in compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the SEBI Circular dated November 11, 2024. This adherence to regulatory requirements demonstrates Dixon's commitment to transparency in its financial dealings.

Stakeholder Interests

Dixon Technologies has clarified that the promoter and promoter group have no interest in this transaction beyond the existing subsidiary relationship. This statement aims to assure shareholders and regulatory bodies of the transaction's neutrality and alignment with the company's overall business strategy.

About Padget Electronics

Padget Electronics Private Limited, as a wholly owned subsidiary of Dixon Technologies, plays a crucial role in the company's operations. While specific details about Padget's business activities were not provided in the disclosure, the substantial guarantee suggests its significance in Dixon's broader corporate structure and strategy.

This corporate guarantee issuance underscores Dixon Technologies' support for its subsidiary operations and may indicate plans for expansion or significant business activities within Padget Electronics. As the electronic manufacturing services sector continues to evolve, such financial arrangements between parent companies and their subsidiaries are not uncommon, often facilitating growth and operational flexibility.

Investors and market analysts will likely monitor how this guarantee impacts Dixon Technologies' financial position and the potential benefits it may bring to the company's overall business performance in the coming quarters.