Handset manufacturer Lava Mobiles is looking to raise $100 million from strategic partners to fund its expansion in the country. “We are looking to dilute our equity to strategic partners…we are looking to raise $100 million and it will take around 6-8 months to finalize,” the company’s Chairman and Managing Director Hari Om Rai told PTI on the sidelines of the Make in India Week held here last week. Also Read - Lava Probuds launched in India: You can grab it at Re 1 during first saleAlso Read - Lava Z2 Max with a 7-inch display launched in India: Price, specifications
He said the company is already in talks with a couple of strategic investors, including foreign companies interested in investing in the country. Rai, however, declined to share any details regarding the valuations which the company, founded in 2009, is expecting. He added that the entire equity is currently held by founders and employees. Speaking about venture capital firms, he said their focus is on software rather than hardware.
“One of the challenges is finance. There is a lot of traction on the software side of things among the VCs and PEs.
But on the hardware side, the traction is a little less. People believe that it is a commodity market. I believe it is not so. There is a great chance for India,” he said. The company has prepared a plan to increase its overall capacity to 200 million units in the next 7-10 years, which will entail an investment of Rs 2,615 crore, of which Rs 500 crore will be invested over the next two years.
At present, the company has a plant in Noida with a capacity of 28 million phones a year, which it plans to double over the next 3-6 months, he said. It has also bought a land parcel in Tirupati and is scouting for locations to set up units in Tamil Nadu and Maharashtra, he said. The capacity ramp up is part of its strategy to decrease dependence on China for manufacturing of phones and shift those jobs to India, he said, adding that the number of employees at its manufacturing facilities will almost double to 8,000 in a year as more capacity gets created.
Apart from serving the large domestic demand, Lava is also looking to export phones to markets like Africa and Indonesia, Rai said. Responding to critics who say the country is focussing on low-key jobs of assembling the phones, he said, “The lowest level of manufacturing is the assembly, but this is where you can employ the largest number of people. You cannot employ large number of people in a fabrication unit (for making semiconductors) where you have automation.”
“I don’t think India can win the race in automation with other countries which have capital,” he said.