Micromax Informatics, India’s second largest smartphone maker, plans to raise funds through initial public offering. The issue pegged around Rs. 3170 crores may hit markets during the next financial year.
Micromax Informatics came into limelight when they launched their mobiles in 2008. The company launched many affordable smartphones which are cheap. In turn the company gained lot of popularity in smartphone world. For the quarter ending September 2014, Micromax has cornered 20% of the smartphone market closely following the market leader Samsung by 24%.
Micromax is planning to sell a minority stake in its initial public offering. According to the sources, the company has shortlisted investment bankers Goldman Sachs and Morgan Stanley to manage entire activity of initial public offering. They further added that some of the investors may exit the company during public offering.
During 2010, Micromax received 2 rounds of venture capital. In January, the company received $ 45 million from TA Associates, one of oldest and largest private equity firms in the world. Further Micromax received another round of venture capital infusion of $43 million from Sequoia Capital, Sandstone Capital and Madison India Capital in September.
Due to good stock market environment, Micromax expects a 14 to 15 times higher valuation of its operating profit. The company had plans to go for initial public offering during 2010, hired banks and was planning to raise $150 million. Due to poor market sentiment it shelved plans of IPO.
Micromax is facing tough competition from Chinese players like Xiaomi, Gionee, Huawei and a number of Indian smartphone manufacturers like Spice, Lava, Intex and Karbonn. Micromax has expanded its network in South Asia and further looking on expansion in emerging markets like Russia and Brazil.
Micromax has adopted several strategies to increase volume in the market. Google has tied with Micromax for the launch of Android One. Under Android One program, Google will provide a set of software and hardware specifications to handset manufacturers to produce smartphones.
Their collaboration with Cyanogen thru their subsidiary YU televentures, launched YU Yureka phones affordably priced at Rs. 8,999 will definitely add up to the volumes of Micromax in the following quarters.
The company has tied up with Microsoft to manufacture Windows Phone in India. It had roped in Hugh Jackman to endorse their flagship phones Canvas series. Micromax is trying to position itself to cater both higher end as well as mass markets.
Micromax has diversified into manufacturing of consumer goods like data cards, tablets and consumer electronics like LED televisions.