The company will seek shareholders approval for the initial public offering for up to Rs 2,400 crore, which will consist of an offer for sale by existing shareholders and issuance of fresh equity.
Etmarkets.com has seen the copy of the letter shared with shareholders. As many as seven items will be considered and approved by the shareholders.
The company will also issue bonus shares in 1:1 ratio to existing shareholders. The domestic mobile maker will also seek approval for a stock split of shares in 1:1, to a face value of Rs 5 per share after the split.
According to the dealers in the unlisted market, the stock split and bonus issues were on the cards as shareholders were informed about the same via e-mails by the company earlier.
Following the IPO buzz, the share prices of Lava International have rallied to Rs 600-620 apiece, which was trading at Rs 525-550 at the beginning of the week.
“We expect it to trade in the range of Rs 160-170 after the split and bonus and the company’s valuation at this price is about $1-$1.2 billion,” said Rajesh Singla, Founder of Planify, a pre-IPO consultancy.
The company is adding more products in its arsenal and has strong hold in small Asian and African countries, he added, who expects the DRHP to be filed in the next few weeks.
The company has overseas operations in 11 countries, including Thailand, Nepal, Bangladesh, Sri Lanka, Indonesia, Mexico and some West Asian countries.
The company reported Rs 5,264 crore revenue for the year ended on March 31, 2020, compared with Rs 5,108 crore reported for the year ago. Net profit stood at Rs 107 crore on that revenue, compared with Rs 73 crore in the previous year.
“At current valuations, the company is available at less than twice the sales-to-market cap, which makes it a decent bet,” said Dinesh Gupta, co-founder of Delhi-based UnlistedZone. “However, one should wait for the latest numbers.”
The Noida-headquartered Lava International has not announced its earnings for the financial year ended on March 31, 2021.
Gupta is bullish on the phonemaker and expects it to be a big beneficiary of the PLI (production-linked incentive) scheme for mobile manufacturing in India.
“The PLI scheme will boost their margins and if the company is able to reap the benefits, the bottomline will substantially improve.”
Phonemakers are expected to benefit a lot from the PLI scheme, which offers 4-6 per cent incentive for mobile manufacturers. Lava is one of five domestic manufacturers that have got approvals under the scheme.
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