Homegrown handset company Lava International has likely put its plan for initial public offering (IPO) on hold, according to people aware of the matter.
The company is presently looking to focus on its profitability and take benefit of the PLI scheme. It may refile the draft papers with updated financial numbers and other operating metrics, based on the internal discussions and market condition, according to industry sources.
Queries sent to Lava regarding its plan for IPO and fundraise did not elicit any response.
The company had proposed to utilise the fresh issue of funds on marketing activities, possible acquisitions and working capital needs.
At two million units, domestic smartphone brands like Lava, Micromax, Karbonn, and JioPhone have a total market share of 1.3% of the total smartphone shipments in the country in 2022. Of this, Lava has a share of 0.6%, according to data by Counterpoint.
Lava’s smartphone shipments grew 86% year-on-year to over 900,000 units in 2022, according to Counterpoint.
With regard to the PLI scheme, Lava and some other domestic handset makers have not been able to meet the production and sales targets for all the three years – FY21, FY22, and FY23, according to industry sources.
In order to claim incentives, Lava is now opening itself to the role of electronic manufacturing services (EMS) based on which it can manufacture smartphones for other brands and claim the incentives.
In FY22, Lava’s consolidated revenue from operations rose 7% to `5,878 crore. The company’s net profit rose 8.3% to `187 crore.
Revenue from standalone operations, which constitute the business of mobile phones, tablets and communication equipment, rose 12.7% to `1,822 crore. However, net profit from standalone operations fell 2% to `40.5 crore in FY22.