Cellphone maker Lava plans ₹500 crore IPO
Company’s plans were marred earlier due to volatile market conditions
Indian mobile phone brand Lava is revisiting its plans to list on Indian stock exchanges with the aim of raising ₹500 crore, and has initiated talks with various investment banks for the public offering, a senior executive said. The company is also gearing up to enter the wearables market next month with India-made smartwatches under the subbrand ProWatch.
Lava International president Sunil Raina told Mint that the company was exploring all options to raise funds, including private equity investment, a public listing, or a combination of both with an investor coming in before the initial public offering (IPO).
Raina recalled Lava’s previous plans to secure funding, which did not take off due to volatile market conditions. In September 2021, Lava International Ltd filed a draft red herring prospectus (DRHP) with markets regulator Securities and Exchange Board of India (Sebi) to raise about ₹500 crore through a fresh issue of shares and private placement of about ₹1,000 crore.
On the size and timing of the fundraising, Raina, who was appointed managing director in November, said that the company was looking for funds immediately as it was seeing tailwinds from the Indian market as well as growing export orders. Exports have risen by 20% in 2023 over the previous year.
“Our strategy of giving premium phones at all price points has helped us grow by 200% in the smartphone segment. We’re focusing on ₹10,000-20,000 price segment, and all our devices are 5G-enabled. In feature phones, we have a 25% market share,” he said.
Lava has an in-house capacity of 42 million feature phones and 25 million smartphones a year, which is at 70% utilization.
The output takes care of India and export to 25 countries like Sri Lanka, Nepal, Bangladesh, Qatar and Latin American nations. South American countries are serviced by B Mobile, a brand it acquired in 2021.
As the only Indian player among global smartphone brands in the country, Lava intends to channel the raised funds
THE company is gearing up to enter wearables market with India-made smartwatches
towards research & development (R&D) focused on software for its phones, and brand building to compete with its peers, a majority of which are Chinese.
Lava has a 2% market share as of December 2023 in the smartphone market. It doubled this share over the previous year on the back of Blaze 5G, its 5G device below ₹10,000, targeting the mass market. It