Padget Electronics, a wholly owned subsidiary of Dixon Technologies, announced on Sept 27 that it has signed an agreement with Xiaomi India to manufacture smartphones and other related products for the Chinese brand.

"We are delighted and encouraged by the trust they have placed in Dixon for the association," Atul B. Lall, vice chairman and managing director, said in a statement to the stock exchanges. "We believe that this association will leverage our excellence, superior execution track record, and Xiaomi's expertise and leadership in India business ecosystem, and it represents a major milestone in the Indian government's "Make in India" initiative."

The manufacturing services provider said it will be making Xiaomi-branded smartphones at its facility in Noida, Uttar Pradesh.

The development comes after an earlier announcement about exploring manufacturing and exports in May after the two parties met with minister of state for electronics and information technology, Rajeev Chandrasekhar, at his office.

"They are an ideal strategic partner for us because they share our core values of quality, engineering, prowess, and customer satisfaction." "We are confident that this is just the beginning of a long and fruitful relationship, with enormous potential to further build on shared capabilities to deliver sustainable growth," Lall said in the statement.

Dixon shares reached a 52-week high in intraday trade on Wednesday, before closing 3.7% higher at Rs 5824.20. The announcement came after market close.

To be sure, this is not the first time Dixon has collaborated with Xiaomi to develop products. Dixon has been producing televisions for the former smartphone market leader since 2018. The firm also produces smartphones for Motorola and Samsung.