Domestic Phone maker Lava International is preparing to raise funds via rights issue as it seeks to capitalize on the incentives offered by the government to boost local manufacturing of electronics. The 15-day issue opens on 4th of May, 2021 and can be subscribed till 18th day of the same month. "The Company board of directors in their meeting held on April 30, 2021 have accorded their approval to the issue and allotment of equity shares by way of rights issues to the existing equity shareholders of the company as on April 23, 2021, the record dates, pursuant to 62(1)(a) and other applicable provisions of the Companies Act 2013, if any, read with the rules framed thereunder.", the company wrote to its equity shareholders. The additional funds which shall be raised by the means of rights issue, inter-alia, shall be utilized for business development, meeting its working capital requirements and for general corporate purposes. However, the company has mentioned that the fund requirements and deployment described is based on internal management estimates and has been appraised by any bank, financial institution or any other external agency. These are based on the current circumstances of the company. The company is issuing shares at a price of Rs 533 apiece under its rights issue. The company is entitled for equity shares of face value of Rs 10 each at a premium of Rs 523 per share to shareholders, as on the record date. The company is planning to issue 1.15 per cent of total outstanding equity shares 12.48 crore. The company is likely to issue 14.35 lakh equity shares. According to this mathematics, The company has offered one equity share for every 87 shares held. At the current price quoted in the right issue, the company is valued at Rs 6,650 crore, just 1.27 times its revenue. The phone maker is in the list of homegrown firms, racing to hit primarily with their initial public offering (IPO). Lava has plans to raise around Rs 1,400 crore via primary route. However, the clearity is much awaited. The company’s plans signal the comeback of Indian phone manufacturing, years after domestic producers were edged out of India’s massive smartphone market by Chinese rivals offering cheaper phones with better specs. Smartphone shipments in India hit a record 50 million in the September quarter, according to a report by market research firm Canalys. The government has been working actively on making India an alternative manufacturing hub to China and has announced production-linked incentives and other benefits. Lava is trying to reap benefits from the opportunity created by the PLI scheme for mobile manufacturing in India, which is ruled by Chinese and Korean players. Lava now eyeing a market share of 5 per cent in the smartphone segment. Phone makers are expected to benefit from the government’s new production-linked incentive (PLI) scheme, which offers 4-6% incentive for mobile manufacturers. Lava is one of five domestic manufacturers that have won approvals for the scheme. The company reported Rs 5,264 crore revenue for the year ended on March 31, 2020, compared with Rs 5,108 crore a year ago. The company managed a net profit of Rs 107 crore on that revenue, compared to Rs 73 crore in the previous year. Noida headquartered Lava International is eyeing expansion with exports in focus. It has submitted proposals to make low-cost phones for telcos in the US. The company has overseas operations in 11 countries including Thailand, Nepal, Bangladesh, Sri Lanka, Indonesia, Mexico and some West Asian countries. Lava’s comeback strategy is to replicate the success of Chinese smartphone makers by offering phones with top-notch specifications at lower price points. But the smartphone market share of Lava was 6 per cent in 2015, according to Counterpoint Research, which dwindled to below 1 per cent in 2020.