The approval for the joint venture was granted on Thursday.
Dixon Technologies' shares rose 2.95 percent during Friday's trade to Rs 13,875 apiece.
Dixon to hold majority stake
According to the company's filing, Dixon Technologies will hold a 51 percent stake in the joint venture, while Vivo Mobile India (VMI) will own the remaining 49 percent.
"The share capital of the JV Co will be held in the proportion of 51:49 by the company (Dixon Tech) and VMI, respectively," the filing said, as quoted by NDTV Profit.
Focus on local smartphone manufacturing
The joint venture will manufacture smartphones and other electronic products for Vivo and could also cater to other brands in the future.
The partnership combines Dixon Technologies' manufacturing expertise with Vivo India's technology and market presence, with the aim of expanding production capacity and strengthening supply chain efficiency.
Boost to 'Make in India' initiative
The collaboration is in line with the Central government's 'Make in India' initiative and is expected to further strengthen domestic electronics manufacturing.
The move also reflects the broader trend of global smartphone companies increasing local manufacturing in India amid evolving regulatory and geopolitical developments.