Contract manufacturer Dixon Technologies has entered into a share purchase agreement to acquire a majority stake in Ismartu India, a manufacturing unit of Chinese phone maker Transsion Holdings, in two tranches.
In the first tranche, Dixon will spend about Rs 238.36 crore to acquire 13.8 million equity shares of face value of Rs 10 each, representing a 50.10% stake in Ismartu India, through its shareholders Ismartu Singapore, Transsion Technology and 5A Advisors.
The second tranche will see Dixon acquiring an additional stake between 1.60% and 5.90% in Ismartu India from Ismartu Singapore, subject to the manufacturing unit achieving a profit after tax of `200 crore in FY26, it said in an exchange filing on Monday.
“Shares in the second tranche will be acquired in FY27 for an aggregate consideration, which shall be determined on the basis of a valuation of 20 times of profit after tax of the target company (Ismartu) for FY26, subject to the terms of the share purchase agreement,” the filing added.
Post the second tranche, Dixon will hold a minimum of 51.70% in Ismartu India and will have an option to raise its shareholding to 56%.
Ismartu manufactures electronics and mobile devices under the brand names of Itel, Infinix and Tecno at its three factories in Noida. In FY23, Ismartu India reported a turnover of `6,235 crore.
The deal comes amid the government’s continuous call to Chinese companies to involve local partners in supply chains. Notably, the Indian mobile phone market is dominated by Chinese phone makers.
The deal is subject to approval from the Competition Commission of India (CCI).
“This acquisition is a momentous milestone for us, solidifying our positioning for sustained success and continued leadership in the mobile phones manufacturing industry in India,” said Atul B Lall, vice chairman and managing director at Dixon Technologies.
“The combined expertise, resources, engineering prowess and other manufacturing capabilities of both the companies will further capitalise on growth opportunities in the burgeoning Indian EMS (electronics manufacturing services) industry,” Lall added.
Through this deal, Dixon is also looking at scaling manufacturing of other electronic product categories and building a component ecosystem in India.
Dixon makes smartphones and feature phones for companies like Xiaomi, Samsung, Motorola, Jio, among others, at its four plants in Noida. The company has a capacity to manufacture 30 million smartphones and 50 million feature phones.