“The company’s board of directors in their meeting held on April 30, 2021 has accorded approval to the issue and allotment of equity shares by way of rights issues to the existing equity shareholders of the company as on April 23, 2021, the record dates, pursuant to 62(1)(a) and other applicable provisions of the Companies Act 2013, if any, read with the rules framed thereunder,” the corporate wrote to its fairness shareholders.
The rights issue opened on May 4, and the corporate is issuing fairness shares of face worth of Rs 10 at Rs 533 apiece every, at a premium of Rs 523 per share, to its shareholders as on the report date.
The firm is providing one fairness share in opposition to each 87 shares held. Accordingly, will probably be issuing 1.15 per cent or 14.35 lakh of complete excellent fairness shares 12.48 crore underneath the precise issue to boost up to Rs 77 crore via the rights issue. The 15-day issue may be subscribed until May 18, 2021.
Lava shares have been buying and selling within the Rs 400-425 value vary within the unofficial marketplace for unlisted shares. At the precise issue value, the corporate is valued at Rs 6,650 crore, simply 1.27 instances its annual income.
The telephone maker is more likely to quickly be a part of the listing of homegrown corporations which might be racing to hit the first market with their preliminary public choices (IPO). Lava has plans to boost round Rs 1,400 crore via the first issue, which is seemingly being held up in the meanwhile.
The firm’s plans sign the comeback of Indian telephone manufacturing years after home producers had been edged out of India’s giant market by Chinese rivals providing cheaper telephones with higher specs.
Smartphone shipments in India hit a report 50 million within the September quarter, based on a report by market analysis agency Canalys.
“Lava is all set to grab the opportunity created by the PLI (production-linked incentive) scheme for mobile manufacturing in India, a space currently ruled by Chinese and Korean players,” stated Umesh Paliwal, co-founder of Delhi based mostly boutique agency Unlistedzone. Already a dominant drive within the characteristic telephone market, Lava is now eyeing a market share of 5 per cent within the smartphone phase.
Phonemakers are anticipated to learn rather a lot from the PLI scheme, which gives 4-6% incentive for cellular producers. Lava is considered one of 5 home producers that have gotten approvals underneath the scheme.
Paliwal from Unlistedzonde stated, “Dixon Technologies is reaping the benefits of the PLI scheme and it is already evident in the share price. Lava is pushing hard on similar lines. At the current valuation, it is available at m-cap/sales of 1.3 times,” he stated.
The firm reported Rs 5,264 crore income for the 12 months ended on March 31, 2020, in contrast with Rs 5,108 crore reported for the 12 months in the past. Net revenue stood at Rs 107 crore on that income, in contrast with Rs 73 crore within the earlier 12 months.
The Noida-headquartered Lava International is eyeing enlargement with exports in focus. It has submitted proposals to make low-cost telephones for high telcom gamers within the US too. The firm has abroad operations in 11 nations, together with Thailand, Nepal, Bangladesh, Sri Lanka, Indonesia, Mexico and a few West Asian nations.
Lava’s comeback technique is to duplicate the success of Chinese smartphone makers by providing telephones with top-notch specs at lower cost factors. Lava’s share of the smartphone market stood at 6 per cent in 2015, after which fell beneath 1 per cent in 2020, Counterpoint Research stated.
However, not everyone seems to be gung ho over the inventory. Sambhav Aggarwal of Arms Securities, one other agency dealing in unlisted area, is just not very a lot bullish on Lava.
“Despite the rights issue at a higher price, there are sellers at Rs 450-460 levels. Market share of their products is decreasing every year. Users are shunning Lava mobile phones in other countries as well,” he claimed.