The JV is targeting the Bharti group to pick up 80-85 percent of the value of its cumulative sales of five years
Dixon group on Wednesday formed a joint venture (JV) with Bharti Enterprises to apply for the government’s production-linked incentive (PLI) scheme for manufacturing of telecom and networking products.
Under the plan, the JV is targeting the Bharti group to pick up 80-85 percent of the value of its cumulative sales of five years.
The JV, in which the electronic manufacturing services (EMS) player will hold a 74 percent shareholding (the rest with Bharti), will be the first company to be applying to avail of telecom PLI incentive.
Under the scheme, the government has earmarked an outlay of Rs 12,195 crore for manufacturers of telecom gear with incentives ranging from 4 percent to 6 percent on incremental sales for five years. The detail modalities are being finalized. As part of its proposal, the JV is aiming to reach a cumulative revenue of over Rs 6,600 crore in five years and invest over Rs 100 crore as stipulated under the scheme for getting the incentive.
The JV will manufacture internet set-top boxes, modems, routers, and IoT devices. The company will have the advantage of having an assured buyer in Bharti. Talks are also on with other players. Saurabh Gupta, the chief financial officer of listed company Dixon Technologies, said: “We are confident that we will cross the revenues stipulated under PLI by around 15 percent as we are planning to hit revenues of Rs 600-800 crore in the first year of the PLI itself .”
If the JV reaches the PLI target, it will be able to get incentives under the scheme of around Rs 322 crore in the five-year period, which is three times its incremental investment. Gupta said the joint venture could extend the product line later to include other network wireless products, radios, amongst others. While its focus will now be on import substitution, the long-term effort would be to export out of India, he said.
No comments:
Post a Comment