The IPO consists of a fresh issue of equity shares worth Rs 500 crore and an offer for sale (OFS) component of 43,727,603 equity shares.
According to the Draft Red Herring Prospectus (DRHP), the OFS consists of sale of 12.5 million equity shares by the company’s chairman Hari Om Rai, up to 3.13 million shares by Shailendra Nath Rai, up to 7.89 million shares each by Sunil Bhalla and Vishal Sehgal, up to 11.3 million shares by Unic Memory Technology and up to 975,000 shares by Tupperware Kitchenware.
Lava International was founded in 2009 by HO Rai, SN Rai, Sehgal and Bhalla. The Noida-based handset maker was initially planning to file the DRHP by August but the process got delayed because the exit of its Chinese investor took time and it had to re-audit its books, said people familiar with the matter.
The company expects to use the proceeds from the IPO for marketing and brand building activities, acquisition and other strategic initiatives, including research and development expansion. It will also use proceeds for investment in material subsidiaries and for funding its working capital requirements.
The company reported net profit of Rs 172.61 crore for 2020-21, up from Rs 107.61 crore a year ago and Rs 73.18 crore in 2018-19. The company’s revenues stood at Rs 5,523.67 crore, up from Rs 5,282.45 crore in the previous year.
Lava International is among the Indian companies approved under the government’s production-linked scheme to avail of incentives by boosting local handset manufacturing and exports.
Besides manufacturing its own branded devices, the company has started making Nokia and Motorola branded smartphones through its contract manufacturing business. It is also actively looking for western companies as part of its push into contract manufacturing. It has been working with US companies such as AT&T and General Electric to provide them with affordable smartphones.
