Lava International has reportedly filed draft red herring prospectus (DRHP) with Securities and Exchange Board of India (SEBI) to raise Rs 14-Rs 15 billon through the initial public offering (IPO). As per industry sources, this move is aimed at enabling Lava to better compete with its China based competitors.
Lava’s IPO comprises fresh issuance of equity shares worth Rs 5 billion and an offer for sale (OFS) component of 43,727,603 equity shares. According to the DRHP, the OFS consists of sale of 12.5 million equity shares by Lava managing director and cofounder Hari Om Rai, up to 3.13 million shares by Shailendra Nath Rai, up to 7.83 million shares each by Sunil Bhalla and Vishal Sehgal, up to 11.3 million shares by Unic Memory Technology and up to 0.97 million shares by Tupperware Kitchenware.
As per industry sources, Lava was initially planning to file DRHP by August 2021 but the process got delayed because the exit of its Chinese investor took time and the handset manufacturer had to re audit its books again.
Lava is planning to use proceeds from the IPO for marketing and brand building activities, funding acquisition and other strategic initiatives including R&D expansion. It will also use proceeds for investment in material subsidiaries and for funding its working capital requirements.