Redington plunges over 19% as Apple hires new distributor in India

MUMBAI: Shares of Redington India plunged as much as 19.03 per cent in trade on Wednesday following reports that Apple, the maker of iphones and ipads, is roping in global retail major Brightstar to sell its devices in India.

Redington and Ingram supply Apple’s products in India to other regional distributors, multi-product trade channels, Apple Premium Re-seller stores and Apple Authorized Reseller outlets.

Apple accounts for nearly 70 per cent of Redington’s sales, 12 per cent and 28 per cent of Redington’s consolidated and India revenue, respectively.

The plan to hire Brightstar will be a negative for Redington, say analysts.

“Apple bringing in a third distributor could limit the potential upside for Redington. Currently, Redington’s Apple-related revenue has been growing at 40 per cent+ YoY. Apple’s business also comes with much lower working capital intensity vs. 45 days for the consolidated entity,” said an analyst in a client note.

According to ET, Brightstar has managed to poach Redington's top official who is in charge of the Apple business unit.

Puneet Narang, a telecom industry veteran who heads Redington's iComm Strategic Business Unit, will lead the charge for the Brightstar business, the sources told ET.

At 11:00 am, Redington India was at Rs 116, down 12.22 per cent, on the BSE. It plunged 19 per cent to touch a low of Rs 107 in trade today.