Mobile phones maker LAVA International Ltd has filed a draft red herring prospectus with the Securities and Exchange Board of India to raise up to 5 bln rupees through fresh issue of shares, as per a press release by the company.
The face value of the shares is 5 rupees each.
The offer also comprises an offer for sale of up to 43.7 mln shares by promoters and other shareholders.
Promoters Hari Om Rai and Shailendra Nath Rai will sell up to 12.5 mln shares and 3.1 mln shares, respectively. Besides, promoters Sunil Bhalla and Vishal Sehgal will sell up to 7.8 mln shares each.
LAVA may also consider a pre-initial public offer placement to raise up to 1 bln rupees.
Of the fresh proceeds, the company will utilise up to 1 bln rupees for marketing and brand building activities, and 1.5 bln rupees each on fund acquisition and other strategic initiatives, and investing in subsidiaries for working capital requirements. The remaining fund will be utilised for general corporate purposes.
From 2009
Started in 2009, the New Delhi-based company designs, manufactures, markets, distributes, and services mobile handsets, tablets, and other electronics accessories under LAVA and XOLO brands. It also has a licence agreement with Lenovo, which entitles the company to distribute mobile handsets under the Motorola brand in India.
Among other licences, LAVA also has a multi-year contract with HMD Global for an end-to-end design, manufacturing, supply chain, and distribution of mobile handsets under the Nokia brand in India and overseas.
The company also offers mobile handset solutions ranging from sourcing, design, manufacturing, quality testing, embedding software, and distribution to original equipment manufacturers.
In 2020-21 (Apr-Mar), LAVA was the third-largest feature phone company in India with a market share of 13.4%, in terms of sales volume, according to its draft red herring prospectus.
As of July end, the company's domestic network consisted of 893 active distributors and 116,339 active retailers.
Besides India, the company has presence in many emerging markets, such as Thailand, Sri Lanka, West Asia, Bangladesh, Mexico, Indonesia, and Nepal.
For 2020-21, LAVA's revenue from operations rose 4.7% on year to 55 bln rupees, whereas net profit rose over 60% on year to 1.73 bln rupees.
Axis Capital Ltd, BOB Capital Markets Ltd, DAM Capital Advisors Ltd, and SBI Capital Markets Ltd are the book running lead managers to the issue.
