Electronics manufacturing firm Dixon Technologies and Imagine Marketing, the parent company of home-grown earwear brand boAt, have formed a 50:50 joint venture to manufacture Bluetooth-enabled audio devices and aims to have a revenue of Rs 1,000 crore in the next four years.
The proposed joint venture will undertake the design and manufacturing of wireless audio solutions in India and the partners will co-invest in the evolving Indian mobile accessory market, according to a joint statement. “In the next four years, the revenue generation by the JV would be around Rs 1,000 crore with a strong Ebitda (earnings before interest, tax, depreciation and amortisation) margins and returns ratio.
“The total capex (capital expenditure) required to reach this is Rs 40 crore,” Dixon Chief Financial Officer Saurabh Goswami told PTI. The JV will set up its manufacturing unit at Dixon’s Noida plant and will not only aim to cater to the domestic market but will also look into the exports markets, he added. boAt Lifestyle CEO Vivek Gambhir said the ratio of wearables to smartphone users in India is around 40-50 per cent only.
“As the usage of smartphones increases and more users require wearables devices, that is one of the big opportunities,” said. The country has also increased the number of young population, who prefer wearables such as headphones at work and home, and see multiple products being used by them, he added. Moreover, the segment is also witnessing a shift from branded to unbranded products with a technological shift in the segment, he said adding that the 40 per cent market is still unbranded.
“The current market is projected to grow about 30-35 per cent in the next five years and almost touch Rs 60,000 crore by 2025,” he added. In the JV, both companies will nominate two directors each on the board of the JV. “Both JV partners i.e. the company and Imagine, shall have the right to equity shares in proportion to their respective shareholding structure,” Dixon said. It added that the equity shares of the proposed JV will be issued to the company and Imagine in equal proportion i.e. 50:50.
Dixon Technologies Vice-Chairman and Managing Director said the company has been manufacturing wearables for boAt since the previous financial year and the business relationship is now getting cemented with this joint venture. “Through our partnership, we aim to provide boAt with a faster ability to scale up manufacturing in India with our low-cost structure, high quality and superior execution track record. “We strive to develop innovative products with boAt for not only the discerning Indian consumers but also for global markets, he said.
Imagine Marketing co-founder and Chief Product Officer Sameer Mehta said, “Combining the capabilities of boAt and Dixon in the electronic manufacturing services (EMS) space, we aim to build a strong manufacturing base and ecosystem in India.” Last week, Imagine Marketing had announced to acquire Singapore-based KaHa Pte, an end-to-end smart IoT product development company, a move that will help it create next-generation IoT-enabled wearable products and ecosystem.
While Dixon Technologies had also announced to enter into a JV agreement with Japan-based Rexxam Co Ltd to manufacture printed circuit boards (PCBs) for air-conditioners for the domestic and international markets.