MUMBAI: India’s largest mobile phone maker Micromax Informatics Ltd is reviving its initial public offer plans to help its private equity investors to sell a part of their stake, three people with knowledge of the company’s plans said.
PE funds Sequoia Capital, Sandstone Capital and Madison India Capital will soon appoint investment banks to complete the issue in 2013 after it was withdrawn in July 2011. SEBI had approved Micromax offer proposal to sell 10% stake or 2.15 crore shares for Rs 426 through a public offer in 2011 valuing the company at roughly $1 billion.
In 2010, private equity players Sequoia Capital, Sandstone Capital and Madison India Capital had jointly bought around 6% stake in the company for Rs 200 crore. “This time the company plans to go ahead with a different set of investment banks and there are chances of some of the old ones being replaced by new banks,” another investment banker said. The company spokeswoman did not respond to an e-mail questionnaire from ET.
“The company had mixed results in FY11, however, in FY12 it has performed better and that gives the investors as well as the promoters confidence to raise money from the public markets at higher valuations,” another investment banker who is in talks with the company said. Earlier, the company had appointed JM Financial, Nomura, Citibank and Edelweiss to manage the issue.
Started in 2008 by Rajesh Agarwal, Rahul Sharma, Sumeet Kumar and Vikas Jain, Micromax has grown to be the third largest mobile handset maker by sales in the country. According to data available with Cybermedia, for Jan-June 2012, in the Indian mobile handsets market, Nokia retained leadership position with 22.2% share, followed by Samsung with 13.0% and Micromax with 5.5%, in terms of sales. The company has also started making LED televisions and home theatre systems last year.
According to a CyberMedia Group’s Voice & Data Analytics report for 2012, Micromax had revenues of Rs 1,978 crore for FY 2011-12. The Indian mobile handset market saw a drop of 5% in revenues in FY 2011-12 to Rs 31,215 crore from Rs 33,031 crore in the previous year.
In its previous draft prospectus filed with the capital markets regulator, Securities and Exchange Board of India, the company’s management had said that the company would use about 50% of the IPO proceeds to build a handset making unit preferably in Sriperumbudur in Tamil Nadu, while a sizeable chunk of the remaining money will be used for marketing and advertising.