Lava International files draft papers with Sebi for IPO

Homegrown mobile manufacturer Lava International Ltd has filed a draft paper with the Securities and Exchange Board of India to raise funds via an initial public offering.

The offer comprises a fresh issue of ₹500 crore and an offer for sale of up to 43.73 million shares by its existing shareholders and promoters.

The OFS consist of issue of up to 12.54 million shares by Hari Om Rai, up to 3.14 mln shares by Shailendra Nath Rai, up to 7.84 mln shares each by Sunil Bhalla and Vishal Sehgal, up to 11.27 mln shares by Unic Memory Technology and up to 0.97 mln shares by Tupperware Kitchenware Pvt Ltd.

Axis Capital, BOB Capital Markets, DAM Capital Advisors and SBI Capital Markets are the lead managers to the issue.

Proceeds from the issue worth ₹100 crore will be used for marketing and brand building activities, ₹150 crore for funding acquisition and other strategic initiatives and ₹150 crore for investment in material subsidiaries for funding its working capital requirements.

Lava is a leading end-to-end focused mobile handset and mobile handset solutions company based in India, with operations in a number of countries.

It designs, manufactures, markets, distributes and services mobile handsets, tablets and other electronics accessories under its own LAVA and XOLO brands, and provides value-added software services. The firm also offers mobile handsets solutions to original equipment manufacturers (OEMs) ranging from sourcing, design, manufacturing, quality testing, embedding software and distribution.

Recently, it had signed a partnership licence agreement with Lenovo, which entitles it to distribute mobile handsets manufactured by it under the Motorola brand in India and overseas and a multi-year contract with HMD for an end-to-end design, manufacturing, supply chain and distribution of mobile handsets under the Nokia brand in India and overseas.

It has a manufacturing facility located in Noida, using surface-mount technology (SMT) which is a leading technology in mobile handset manufacturing. As of August, 2021, it had four SMT lines and 12 assembly lines operated by 3,105 workers, with a production capacity of 42.52 million feature phone equivalent handsets per annum. As of July, it had 705 service centers and 60 service wheels across India.

For fiscal year 2021, its revenue from operations stood at ₹5512.87 crore against ₹5264.33 crore a year ago. Net profit for the period stood at ₹172.61 crore versus ₹107.76 crore last year.