India's leading smartphone maker Micromax has planned to raise capital from global investors to make its offerings more competitive than its rivals, and to defend its market share in the world's third-largest smartphone market.
Micromax is in talks to raise as much as $1 billion from global investors, including Japan's SoftBank Corp, The Financial Express reported, quoting sources close to the matter.
The Gurgaon-headquartered firm plans to utilise funds raised abroad in developing new products and technology as the competition in the Indian smartphone segment becomes fierce with the entry of Chinese companies likes of Xiaomi and Gionee.
"International rivals like Samsung and Xiaomi as well as local competitors are investing heavily in R&D. Micromax will have to strengthen its play, in both local manufacturing and R&D, if it wants to stay ahead in the game," an analyst said.
Micromax has recently started a merger and acquisition team to invest in start-ups that work on value-added technologies. Investments in such start-ups are expected to help the company to position its products in a more innovative way.
The company is considering outside investment to develop locally focused software to complement mobile phones already available in 21 local languages, Chief Executive Officer Vineet Taneja told Business Standard.
Micromax estimates to hit $2 billion in sales in the financial year ending March 2015, compared to $1.2 billion last year.
Micromax occupied 22 percent of the total smartphones shipments in India during October-December 2014 quarter, surpassing Samsung, according to research firm Canalys. However, according to Counterpoint's estimates Samsung was the top smartphone vendor during that quarter.