Dixon Technologies has tied up with Bharti Enterprises to form a joint venture company to manufacture telecom and networking products like modem, routers, set top box, etc. Dixon will own 74 percent of the company and Bharti Enterprises will have the rest of the 26 percent.
Speaking to CNBC-TV18, Saurabh Gupta, CFO of Dixon Technologies said that the joint venture will trigger domestic manufacturing for telecom and networking products and strengthen India’s electronic manufacturing sector.
“The joint venture company that we will form with Bharti Enterprises, we have filed all the necessary applications with the ministry of communications --that is the nodal ministry, to avail the benefits under the telecom PLI scheme of the Government of India. This would trigger more domestic manufacturing for telecom and networking products and this will strengthen India’s electronic manufacturing sector and contribute to the government’s vision of Aatmanirbhar Bharat,” he said.
Gupta said that the revenue potential for manufacturing of telecom equipment under PLI is Rs 6,600 crore.
“Overall opportunity will be quite immense and the revenue potential will be very large. So, we will make an investment of Rs 100 crore which is the minimum investment and then there is an incentive which is available on this telecom PLI which is around Rs 320 crore odd. So the incentive to investment ratio is around 3.2 times and the revenue potential will be somewhere around Rs 6,600 core which will be the ceiling revenues. We feel absolutely confident that we should be able to do higher than the ceiling revenues,” he said.
For the current financial year, he expects revenue of around Rs 800-1,000 crore from the joint venture. “We feel absolutely confident because of Bharti coming in. So, we will get a lot of traction and volume from Airtel as well which is a significant player in the telecom space. For the current fiscal we think we should be able to do somewhere around Rs 800-1,000 crore revenues from this joint venture,” he said.Watch video for more.