Why did shares of Dixon Technologies, CG Power and peers witness a sharp fall?

The fall in these shares comes after the Tata Group on Tuesday announced that it will be investing $18 billion in the field of electronics and semiconductors and will open nine new factories in the next two years.

Tata Group Chairman N Chandrasekaran called this field a “long game”.

Bloomberg has also reported on Wednesday, citing sources that Dixon Technologies, along with Apple supplier Foxconn have asked the government to pay them the remaining dues under the Production Linked Incentive (PLI) scheme.

Part of the ₹41,000 crore pledged by the government in subsidies remains unallocated because some companies have not met production targets, Bloomberg reported citing sources, who also added that Dixon is eligible for subsidies worth ₹100 crore if the dues are cleared.

In Dixon’s case, the government is also reviewing whether it made new investments for producing Xiaomi’s smartphones or whether machines were shifted out of another factory which previously assembled the devices, the Bloomberg report stated citing sources.

Shares of Dixon were among the biggest losers within the broader markets in Wednesday’s trading session.

Last week, Dixon was highlighted as the top pick by Nomura in the Electronics Manufacturing Services (EMS) segment.

The brokerage said that Dixon has the potential to test levels of ₹22,256, which is the highest price target on the stock on the street.

Dixon is likely to be a key beneficiary of a 55% year-on-year jump in mobile exports to $26 billion by financial year 2026, according to Nomura.

Out of the 31 analysts that have coverage on Dixon Technologies, 15 of them have a “buy” rating, nine of them say “hold”, while the other seven have a “hold” rating.

Shares of Dixon Technologies ended 8.4% lower at ₹16,900, while those of CG Power ended 3.5% lower at ₹692.7. Shares of Kaynes Tech too ended 4.1% lower on Wednesday at ₹6,950. It must be noted that these shares have seen significant moves on the upside over the last 12 months. Dixon was up 180% in 2024, while those of Kaynes Tech had also seen gains of over 150%.