Dixon goes "Xiaoming" down

Dixon Tech is among the top three losers on the BSE since the opening bell. It opened over 4.5% lower at Rs.4195, going down to an intraday low at Rs,3972, falling more than 9.5%. Its 10% LC for the day is at Rs.3957.20.

The Enforcement Directorate (ED) yesterday seized funds worth Rs.5551 crore from Xiaomi India, a fully-owned subsidiary of China-based Xiaomi group, under the provisions of the Foreign Exchange Management Act (FEMA), 1999.

Dixon is a manufacturing unit of Xiaomi, the largest maker of LEDs for the Chinese company. The fear is that this will have a domino effect on Dixon because last year, the IT had raided the offices of Dixon for alleged tax evasion.

Dixon has assured stakeholders that there will be no impact w.r.t payments to be received from Xiaomi India. The company said that it will be business as usual.

The market is not too convinced and that explains why remains in the red.