A move by a consortium of investors led by Japanese telecom and media group SoftBank to invest up to $1 billion (₹6,200 crore) in home-grown handset manufacturer Micromax Informatics has hit a valuation hurdle. The group of 20 investors were seeking a 20 per cent stake in return for the investment.

“The talks are not progressing as expected as there are differences between the promoters and the investors on the valuation. The talks have not been called off as of yet but they not moving,” a source privy to the development told BusinessLine .

Another source said the recent talks between the two sides did not end on a positive note. If the deal falls, it could also lead to a rejig at Micromax’s leadership team, the source added.

When contacted, a company spokesperson said it does not comment on market speculations. SoftBank could not be immediately contacted for comments. The New Delhi-based company, which counts PE firms such as Sequoia Capital and TA Associates among its investors, had filed for an initial public offering in 2010, but later withdrew the plans due to market conditions.

The company is also understood to be looking at a US listing in the next couple of years, following the stake sale and partial exit by the investors.

Market leadership

In February, research firm Canalys said in a report that Micromax has emerged the country’s top smartphone vendor for the first time, while Samsung Electronics countered the report stating it was the market leader.

To sustain the momentum and grow into new areas such as Internet services, Micromax needs cash. SoftBank has been investing in India since former Google executive Nikesh Arora joined the Japanese major last year.

Recently, SoftBank invested $627 million in Indian online marketplace Snapdeal, making it the single largest investment in an Indian e-commerce company.

Following the investment, SoftBank Group emerged as the largest shareholder in the e-tailer.

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