More reports on: Telecom

Japan's SoftBank to buy 20% of Micromax for $1 bn: report

news
27 March 2015

A group of investors led by Japanese mobile telecom firm SoftBank Corp is in talks to buy a 20-per cent stake for $1 billion in Indian handset maker Micromax Informatics, according to a Reuters report citing unnamed sources.

The investment would value Micromax, an unlisted provider of affordable smartphones that competes with South Korean Samsung Electronics Co, at $5 billion, the sources said. They did not want to be named because the talks aren't public.

Based outside New Delhi, the company had entered the Indian mobile handset market in 2008 and is credited with fuelling the rise of smartphones in the country.

One of the people said a deal would likely involve the sale of some 20 per cent of Micromax by existing investors. Micromax, controlled by its founders, counts private equity firms Sequoia Capital and TA Associates among its investors.

In February, research firm Canalys said Micromax had overtaken Samsung in the fourth quarter as the leading supplier in India's smartphone market, though Samsung later challenged the finding.

Micromax had filed for a public listing in 2010, but shelved those plans citing adverse market conditions. The sources said the stake sale and partial exit of investors could lead to a US listing in the next couple of years.

Neither Micromax declined nor SoftBank were willing to comment.

SoftBank has set lofty goals for investment in India, with chief executive Masayoshi Son saying it will invest about $10 billion in the country's ecommerce sector after it took a strategic stake in online marketplace Snapdeal.

Affordable smartphones and internet connections are driving the country's ecommerce boom and India is the third biggest smartphone market in the world. Low-priced smartphones are the top sellers in the country.

 





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