Dixon Tech Plans 700-crore Public Issue in Sept
New Delhi: Contract manufacturer Dixon Technologies plans to hit the capital markets in the first week of September for raising nearly .₹ 700 crore through a public offer, which will make the Noida-based company the first Indian mobile phone producer to be listed since the launch of the ‘Make in India’ programme. The company, which makes consumer electronics, home appliances, washing machines, mobile phones and lighting products for a number of brands including Panasonic, Phillips, Intex and Gionee, will channel the funds towards setting up a new plant for LED televisions and LED bulbs at Tirupati, paying off debt and getting into new businesses.
“We will get into backward integration for LED televisions with a capacity of 1 million a year, and LED lighting with capacity of 5 million a month, including tubelights, at the Tirupati plant, which will be used for exports,” said Sunil Vachani, chairman and managing director of the company. “With the new plant, we will be the third-largest manufacturer of LED bulbs globally, with a capacity of 10 million a month,” he added. Dixon will also enter into making security systems, cameras, recorders and digital video recorders. Tirupati will be the firm’s seventh plant after three facilities each in Noida in Uttar Pradesh & Dehradun in Uttarakhand.
The company, which got an approval from the Securities Exchange Board of India (Sebi) earlier this month, will raise fresh equity of .₹ 60 crore through the offer. While its long time investor, Motilal Oswal Private Equity, will exit partially as it will sell 24% from its 30% stake, by selling 2.6 million shares, the promoters will sell 1.1 million shares, taking the total shares on offer to 3.7 million. Motilal Oswal had invested .₹ 40 crore in 2008.
Proceeds from the sale will go to paying off half its outstanding debt of .₹ 45 crore, as per the draft prospectus filed last month. Post the offer, retail investors will hold about 40% of the company. IDFC Bank, IIFL Holdings, Motilal Oswal Investment Advisors and Yes Securities are the book running lead managers to the issue.
Co to use funds to set up a new plant for LED TV and LED bulbs, pay off debt and get into new businesses