Domestic phone-maker Lava to raise $90 million from US fund, to invest in R&D

New Delhi: Indian phone-maker Lava International, on Tuesday, said it that it will raise $90 million (Rs 630 crore) from GEM Global Yield Fund to invest in R&D with the aim of emerging as a handset market leader in the sub-$150 price segment.

GEM group will make the investment over the next 36 months for through a ‘Share Subscription Facility’ which will allow the company to sell American depositary receipts to the US fund house in exchange for drawing down available funds, Lava said in a statement.

“The company will use the funds to strengthen its business by funding its research, development and business expansion activities, with the objective of becoming a market leader in the sub-$150 cellular phone segment,” Lava said.

Lava’s smartphone assembly plants have been long under-utilised. The combined share of Indian players has slumped to around 3%—from over a combined 40% at their peak mid-2015—in a market swamped by Chinese players such as Xiaomi, Oppo, and Vivo, besides Korea’s Samsung.

Despite fading presence and tough competitive scenario, Lava has made significant investments to ramp up its research and development.

At the peak of Sino-US trade war in August last year, Lava along with Micromax had bagged a Rs 2,500 order for manufacturing sub-$200 devices from US telco major AT&T along with rivals T-Mobile and Sprint.

Along with having a strong foothold in the feature phones space, Lava also established its presence in contact manufacturing when it bagged a multi-crore deal from US conglomerate General Electric to manufacture hand-held devices meant specifically for medical use in September last year.

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