Lava International Limited has filed for IPO with Rs 500 crores in fresh equity shares and 437 lakh equity shares from existing shareholders. Lava International is the third-largest feature phone manufacturer in India.
About Lava International Ltd.
The company is an Indian end-to-end focused mobile handset and solution company. They are the third-largest Indian feature phone manufacturer and the fifth-largest globally by market share.
They cater to PAN Indian market and have a significant presence in several countries, including emerging markets in Thailand, Sri Lanka, the Middle East, Bangladesh, Mexico, Indonesia, and Nepal.
Lava International Ltd. IPO Objective
- The company will use the net proceeds raised for marketing and brand building purposes.
- Rs 150 crore will go towards funding acquisition and strategic initiatives.
Why should you invest in the Lava International Ltd. IPO?
- The company manufactures and sells a wide range of mobile handsets, tablets and other electronic accessories under its Lava and XOLO brands.
- According to F&S, the company captured a 13.4% market share by sales volume in 2021.
- They are India's third-largest feature phone company with a 10.2% market share in the less than USD 70 segment.
- Lava Internation has signed a licence agreement with Lenovo to allow it to distribute mobile handsets manufactured under the Motorola brand in India.
Lava Internation Ltd. Noteworthy Highlights
- The company has derived respectively 29.33% and 70.67% of its revenue from domestic and international businesses.
- Lava International offers mobile handset solutions to OEMs.
- According to an F&S report, India's mobile phone subscription market will grow at a CAGR of 3%, from 1,181 million in 2021 to 1,369.1 million in 2026.
IPO Financials
| Particulars | FY21 | FY20 |
|---|---|---|
| Revenue From Operation | 55,128.74 | 52,643.29 |
| EBITDA | 2512.15 | 1992.56 |
| EBITDA Margin (%) | 4.56 | 3.79 |
| Profit After Tax | 1,726.08 | 1,077.6 1 |
| EPS | 3.15 | 1.97 |
Know before investing
Strengths
4F&S report predicts a shift from feature-based phones to entry-level smartphone subscribers in India.
The company's technical and R&D capacities will help it capitalise on the trend change.
The company has a strong brand recall in the under $70 market segment.
The brand has established itself in several emerging and foreign markets and recently launched its products and services in the USA.
Risks
4The brand continues to face challenges from large and established competitors.
Failing to anticipate changing market and customer preferences will hurt the company's future cash flow.
Technical breakthroughs that the brand fails to match or adapt may render its products obsolete.
Its profitability could be harmed by its inability to maintain and expand its sales.
