Lava survived the Chinese onslaught. It now has bigger plans

Sunil Raina, executive director at Lava International, did not disclose the valuation for its current funding effort but referred to an earlier attempt. “During our listing attempt in September 2021, bankers had assigned us a ₹14,000 crore ($1.7 billion) valuation,” he said.

He also declined to reveal the likely valuation or a timeline for re-filing its public listing papers. “An initial public offering (IPO) will be a strategic move that we will consider only when we build up a certain scale,” Raina said. “To do that, we will invest additional funds into marketing and increase our presence across more markets with both online and offline retailers.”

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Lava is looking to raise funds for expansion when its overall market share and yearly sales have remained muted despite the government’s push for local manufacturing across sectors. Data sourced by Mint from Counterpoint, as well as estimates shared by Raina, indicated that Lava sold approximately 1.5 million smartphones in 2024. In the fiscal through March 2024, Lava International’s consolidated revenue tumbled 25% on-year to ₹3,646 crore ($426 million), and a net operating profit slumped 85% to ₹11.6 crore ($1.4 million).

The company also faced setbacks. In October 2023, its erstwhile managing director Hari Om Rai was arrested by the Enforcement Directorate in a money laundering probe on China’s BBK Electronics-backed electronics brand Vivo. In September 2021, Lava’s plan to go public was halted as the Securities and Exchange Board of India (Sebi) asked the company to revise and file its papers—without specifying what information was missing.

FY25 has been better, Raina said.

Lava is looking to raise funds for expansion when its overall market share and yearly sales have remained muted despite the government’s push for local manufacturing across sectors.

“This year, we expect to report 10% annual growth—both in terms of device shipments and revenue. About 80% of our sales still come from offline channels, but we’ll be ramping up marketing and outreach efforts this fiscal to reach out to a wider customer base,” Raina said. “Going forward in FY26, we’ll also be investing in software research and development (R&D) to create intellectual properties (IPs)—this is a key part of earning a bigger margin in the long run.”

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“There were setbacks, but since then, we’ve revised our board structure and realigned ourselves. We are a professionally run company, so there is no conflict with regard to how we function,” Raina said.

Lava’s survival is important when the government seeks to present Indian electronics brands to the world and create higher value in the domestic electronics market—currently focused on low-cost, mass-scale assembling and repackaging of white-label devices brought from abroad. Lava is also the only surviving Indian smartphone brand that has moved past the China onslaught on the Indian market from a decade ago, which brought the likes of Xiaomi and Oppo to India.

Analysts, however, have mixed views on Lava. A senior analyst at a top market research firm, who requested anonymity since it works closely with the company, said that Lava’s target of achieving a 10% market share in the industry by 2030 “is a tough, tough order to scale”.

“The smartphone market is very stagnant in India, and industry stakeholders realize that India’s feature phone users may not necessarily be a customer base that would switch to smartphones imminently,” the analyst said. “In fact, it has been this way for a while. So, Lava’s real growth will come from mostly returning users—but any user buying their second smartphone or beyond always looks for a more premium device than a basic one priced below ₹10,000. But this is a very stagnant segment—where will such steep growth come from here?”

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Data sourced from Counterpoint showed that Lava had a market share of 1% in India in 2024. Between 2022 and 2024, the domestic smartphone market expanded at a compounded annualized rate of 1.5% per annum. Raina projects Lava to reach a 10% market share by 2030. That would require a growth of nearly 60% per annum compared with the current pace of 10%.

However, Tarun Pathak, research director at Counterpoint, believes there is potential for growth. “While the projection is likely too high, offline retailers and customers alike do have good feedback on the brand’s revival. What Lava needs is a robust marketing campaign to shed its previous brand image and create a new one showcasing its potential to stand neck-and-neck against Samsung, Xiaomi and others.”

Between 2022 and 2024, the domestic smartphone market expanded at a compounded annualized rate of 1.5% per annum.

According to Pathak, Lava’s devices are offering good quality. “But what is truly needed for Lava is a hook—such as Samsung’s premium play, Xiaomi’s camera focus, or Oppo’s reliability marketing strategy.”

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With its planned fundraise and expansion, Lava eyes a place in the big league. While a stagnant market threatens to play spoilsport, Lava is not focusing on smartphones alone to boost revenue and margins.

“We have our own assembly plants, which will only benefit from the Centre’s components scheme. This also gives us some margin advantage, and we can also manufacture for other brands—as we have done before with the likes of Nokia,” Raina said. “This can give us added revenue as a technology group. We are also looking to create our own IPs, starting with software design, and invest heavily in marketing to show customers the value of our brand.”