Dixon Technologies tanks 14% in 2 days; stock nears 52-week low

The Enforcement Directorate, on Saturday, "seized" over Rs 5,551-crore worth fund of Chinese mobile manufacturing company Xiaomi for violating the Indian foreign exchange law

Shares of Dixon Technologies slipped 5 per cent to Rs 3,784.65 on the BSE in Wednesday's intra-day trade, falling 14 per cent in the past two trading days, despite the company clarifying that there is no adverse impact on the business of the company due to the Enforcement Directorate's (ED) seizure of assets of Chinese mobile manufacturing company Xiaomi.

The stock of the consumer electronics company traded close to its 52-week low of Rs 3,760 touched on August 24, 2021. It had hit a 52-week high of Rs 6,240 on October 19, 2021. At 12:55 PM, it was trading 4 per cent lower at Rs 3,830, as compared to 1.4 per cent decline in the S&P BSE Sensex.

"The price movement of security of the Company can be consequence of recent news circulated widely in the media regarding one of our key customer in LED TV business... We would like to submit to the exchange that there is no adverse impact on the business of the Company and the Company perceives no impact on its receivables," the company said in an exchange filing. READ HERE

The ED, on Saturday, "seized" over Rs 5,551-crore worth fund of Chinese mobile manufacturing company Xiaomi for violating the Indian foreign exchange law, a PTI report said quoting officials.

In a press release after the ED's statement, Xiaomi Technology India Private Limited said its operations in the country are "firmly compliant with local laws and regulations".

The company (also called Xiaomi India) is a trader and distributor of mobile phones in the country under the brand name MI. "Xiaomi India is a wholly-owned subsidiary of the China-based Xiaomi group. This amount of Rs 5,551.27 crore lying in the bank accounts of the company has been seized by the Enforcement Directorate," the agency said in a statement. CLICK HERE FOR FULL REPORT

Dixon is a company engaged in inter-alia manufacturing of the products in the consumer durables, lighting, home appliances, mobile phones and other electronic items in India.

The Padget Elecronics Private Limited (‘Padget’), a joint control Company has been engaged by Rstar, Goldex (HK) Technology, and Syntech (HK) Technology to manufacture mobile phones under the brand Gionee pursuant to manufacturing agreement dated 30th March, 2016 entered into by the Padget with Rstar. Pursuant to the Manufacturing arrangement, the Padget has been importing parts & components directly from the suppliers for the purpose of manufacturing the products and the Padget is selling the manufactured Products to the distributors  appointed by the Suppliers in India, Dixon said in FY21 annual report.