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Lava International has planned to launch an IPO. The company has written a letter to the shareholders in this regard. The company's IPO will include the issuance of new shares as well as the Offer for Sale. Under OFS, the existing promoters of the company will sell their shares. Lava is a domestic company manufacturing mobile phones.
According to sources, the IPO of Lave International could be in the range of Rs 1,400 to Rs 1,500 crore. With this plan of the company, it seems that it wants to make a comeback in the domestic mobile phone market. In the last few years, the domestic mobile phone market has been dominated by Chinese companies. His aggressive approach has pushed domestic mobile companies to the margins.
In the market of unlisted shares, the share price of Lava is running from Rs 375 to 400. Last month, the company had allotted shares at a price of Rs 533 per share under the rights issue. In this way, the company had put its valuation at Rs 6,650 crore. This was just 1.27 times the company's annual revenue in the financial year 2019-20.
Dinesh Gupta, the co-founder of UnlistedZone, said that the management of Lava is committed to the IPO plan. Logically, the share price in the IPO cannot be less than the price in the rights issue. "The issue looks attractive considering Lava's growth plan. The government's PLI scheme will boost the company's margins. This will also strengthen its balance sheet," he added.
Under the PLI scheme, companies producing mobiles in the country get an incentive of 4 to 6 percent. Lava is among the five companies that have been allowed to manufacture mobiles in the country under the government's PLI scheme.
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