Dixon Technologies backs Rs 2,101 crore guarantee as it deepens India Lenovo deal to boost domestic IT hardware manufacturing

Dixon Technologies has provided a Rs 2,101 crore corporate guarantee to support its subsidiary Padget Electronics in fulfilling its contract with Lenovo, signalling a significant push to expand domestic production of laptops and IT hardware under the revised PLI scheme in India.

Dixon Technologies has given a corporate guarantee worth $220 million, or about Rs 2,101 crore, for the benefit of its wholly owned subsidiary Padget Electronics, backing payment obligations to Lenovo Ireland International as the two sides deepen their manufacturing tie-up in India. The company said the guarantee is continuing and irrevocable, and is intended to cover Padget’s purchases of raw materials, parts and components needed to make Lenovo products.

According to Dixon’s regulatory filing, the commitment sits on the parent company’s books as a contingent liability and has no immediate cash impact. The filing also states that the guarantee is being provided on Padget’s behalf up to the full aggregate limit of $220 million.

Padget first won Lenovo’s business in December 2023 for the production of laptops and notebooks under the revised Production-Linked Incentive scheme for IT hardware. Reuters has reported in previous coverage of the deal, through business publications, that the contract was expected to be formalised through a definitive agreement and linked to Dixon’s efforts to scale up domestic electronics manufacturing.

Business Standard reported at the time that Dixon planned to build a new plant in Noida for the programme, with a projected annual output of more than one million laptops and an investment of about Rs 250 crore. The broader strategy fits into Dixon’s wider push into IT hardware, with the company signalling ambitions to build a far larger business in laptops, notebooks and related devices over the next several years.