Mobile handset-maker Micromax Informatics Ltd has withdrawn its initial public offering (IPO), citing weak market conditions. Micromax, which is the biggest Indian mobile brand, has withdrawn its draft red herring prospectus (DRHP), filed with the market regulator SEBI on June 17, 2011.
A Micromax spokesperson has confirmed to VCCircle that the company will be looking to go for an IPO in the next fiscal, starting April, 2012. According to him, Micromax is not looking at other fund-raising channels like private equity.
Micromax, which is backed by private equity investors like TA Associates and Sequoia Capital India, had filed for an IPO in September, 2010, looking to mop up around $150 million from the capital markets. Its DRHP was approved bySEBI in January, 2011. Earlier this year, it had reportedly cut its issue size to around $105 million as the markets started to weaken.
According to Voice & Data, Micromax is the third largest mobile handset brand, the toppers being Nokia and Samsung respectively. Micromax grew 43 per cent during FY11, with revenues increasing to Rs 2,289 crore from Rs 1,602 crore in FY10, while its market share stood at 6.9 per cent. As of March 31, 2010, Micromax had cash reserves of Rs 226 crore with no debt.
Although Micromax had raised Rs 410 crore through two rounds of private equity funding since December, 2009, just about one-third of the capital had gone into the company while the rest had been used to buy promoters’ stake. While TA Associates holds 15 per cent stake in the firm, other investors are Sequoia Capital (2.68 per cent), Sandstone Capital (2.68 per cent) and Madison India Capital (0.39 per cent).
JM Financial Consultants, Citigroup Global Markets and Edelweiss Capital were the global co-ordinators and book-running lead managers to the issue while Nomura Financial Advisory was the BRLM.