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Dixon Technologies to launch Rs600 crore IPO on 6 September

LiveMint logoLiveMint 29-08-2017 Swaraj Singh Dhanjal

Mumbai: Dixon Technologies (India) Ltd, a contract manufacturer of electronic products, on Tuesday said it will be launching its Rs600 crore initial public offering on 6 September.

Dixon, backed by Motilal Oswal Private Equity (MOPE), provides manufacturing services for products such as LED TVs, semi-automatic washing machines, lighting products and mobile phones.

The company has priced its shares in the range of Rs1,760-1,766 per share.

The IPO consists of a fresh issue of shares worth Rs60 crore and an offer for sale of 3.05 million shares by MOPE. At the upper end of the price band, the stake sale will give MOPE around Rs540 crore.

MOPE currently holds a 24.31% stake in the company.

MOPE had invested Rs40 crore in Dixon in July 2008 from its first private equity fund—India Business Excellence Fund I (IBEF I).

Dixon plans to use the proceeds from the IPO for repayment of debt, setting up an LED TV manufacturing unit at its Tirupati facility for enhancement of its backward integration capabilities in its lighting products vertical at its Dehradun facility and for upgradation of its IT infrastructure.

IDFC Bank Ltd, IIFL Holdings Ltd, Motilal Oswal Investment Advisors Ltd and Yes Securities (India) Ltd are managing the share sale.

Dixon’s clients include companies such as Panasonic India Pvt. Ltd, Philips Lighting India Ltd, Haier Appliance (I) Pvt. Ltd, Gionee, Surya Roshni Ltd and Reliance Retail Ltd among others.

The company plans to expand its capabilities across all its product categories—consumer electronics, home appliances, lighting and mobile phones.

“In home appliances, where we currently manufacture semi-automatic washing machine, we plan to start making fully automatic machines. In mobile phones, we plan to start assembling of motherboards and in the lighting category we plan to enter street lighting, which is around one third of the lighting market. We will also look at exports from our Tirupati facility,” said Sunil Vachani, executive chairman at Dixon Technologies.

Mobile phones, a category that Dixon entered only a year and half ago, now contribute a significant part of the company’s revenue.

In the financial year 2016-17, consumer electronics (LED TVs) contributed 34% to the company’s top-line, followed by mobile phones with 33% and lighting with 22% contribution to revenue. Home appliances (semi-automatic washing machines) and reverse logistics contributed 8% and 3%, respectively.

The company reported revenue of Rs1,645.6 crore in financial year 2016-17, as against revenue of Rs1,253.6 crore in the previous year.

It reported a profit of Rs46.4 crore in 2016-17 as compared to a profit of Rs36.4 crore in the previous year, according to the company’s IPO filing.

On Monday, Mint reported that several companies including Dixon Technologies were planning to launch their IPOs in September.

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