Chinese smartphone giant Vivo is poised to open one of India’s largest mobile phone manufacturing plants in Greater Noida next month. This state-of-the-art facility, established with an investment exceeding Rs 3,000 crore, will boast an annual production capacity of 120 million devices, according to The Economic Times.
Initially, Vivo engaged in discussions with the Tata Group, the Murugappa Group, and Indian contract manufacturer Dixon Technologies regarding a potential joint venture. However, negotiations stalled due to disagreements over valuation. Consequently, Vivo is actively seeking a local joint venture partner in India to oversee its manufacturing operations, sources cited in the report indicated.
Vivo recently vacated its leased manufacturing facility, which had an annual capacity of 40 million devices. This plant has now been acquired by Bhagwati Enterprises, the manufacturing arm of Micromax Informatics. The new facility spans 170 acres in Greater Noida and significantly enhances Vivo’s production capabilities.
Indicating a potential joint venture, sources at Dixon Technologies mentioned that the company is in the early stages of discussions with Vivo. Dixon is exploring a potential agreement similar to the one it has with Transsion Holdings for Vivo’s manufacturing operations. In April, Dixon announced plans to acquire a majority stake in Ismartu India, a manufacturing unit owned by Transsion Holdings, initially purchasing a 50.10% stake for Rs 238.36 crore in cash, with a future aim to increase ownership to around 55%. This transaction is expected to be finalized by FY27.
For several months, Vivo has been in discussions with various Indian companies. However, agreements were not reached due to valuation disputes, management control issues, and other challenges. An independent third party must determine the company’s valuation, and there cannot be a forced sale of shares at a discounted price, considering Vivo’s significant investments in the Indian market so far.
The Tata Group is in advanced discussions to acquire a majority stake in the Indian division of Vivo, with negotiations currently focused on finalizing the valuation. This move aligns with the Indian government’s potential approval for joint ventures between Indian and Chinese companies, provided the Indian partner holds a majority stake of at least 51% in the local unit.
The Enforcement Directorate (ED) has alleged that Vivo unlawfully transferred Rs 62,476 crore to China to evade taxes in India. Despite these challenges, Vivo’s new facility marks a significant milestone in its commitment to expanding its manufacturing footprint in India.
