Karbonn Mobiles renews efforts to sell a 20% stake to private equity investors

Investments in Karbonn Investments

Posted by admin on 2024-11-28 12:04:10 |

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Karbonn Mobiles has renewed efforts to sell a 15-20% stake to private equity investors after failing to secure investments in recent years. The company aims to raise ₹1,000 crore to fund its plans for establishing a manufacturing plant and acquiring a Korean R&D firm, according to a senior executive. Karbonn, a joint venture between Delhi-based Jaina Group and Bangalore-based UTL Group, holds a 5% share in India's ₹33,000-crore handset market and seeks to finalize the deal by December.

Managing Director Pradeep Jain revealed ongoing discussions with international PE investors, with plans to divest 15-20% equity for ₹1,000 crore within six months. Of this, ₹600 crore will be allocated to a mobile manufacturing plant in Chennai, while ₹400 crore will go toward acquiring a Korean R&D center, with an announcement expected by December.

Despite earlier funding setbacks due to unfavorable market conditions, Executive Director Shashin Devsare emphasized the company’s focus on building value through smartphones and tablets, primarily funded by internal accruals. Future plans include launching proprietary and Windows-based smartphones to stand out in a highly competitive market dominated by global players like Samsung.

However, analysts caution that raising funds may be challenging due to the tough economic climate and shifting market dynamics. Deepak Kumar, an independent analyst, noted that local brands face increasing difficulty competing with multinational innovators. Karbonn sold about a million handsets monthly last year and aims to double this in 2012-13, targeting 20 million units with an average price of ₹3,500-4,000, a significant increase from the previous ₹1,800-2,000 range.

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