In a move to stay competitive against rivals like Samsung and Xiaomi, domestic mobile handset maker Micromax is planning to rope in strategic investors on its board in the next 2-3 months, as part of its plans to expand product portfolio and services.
"Micromax is looking at beefing up investments in research and development of its products and services and so, getting a strategic investor on board makes sense," sources said.
They added that the company is in discussions with potential partners and these kind of decisions "take time".
"It will be a month or two before the company announces anything," they said.
When contacted, a Micromax spokesperson said: "As a company policy, we do not comment on any market speculation."
There have been speculations that Micromax is looking at raising as much as $1 billion from overseas investors, including Japan's SoftBank, as it looks to invest in startups and bringing in innovative technology to defend its turf against rivals like Samsung and Xiaomi.
However, the company has stated that its founders will stay on.
Sources said though Micromax has the option of going in for listing but the Gurgaon-based Micromax is likely to opt in favour of "strategic partners" than an IPO.
In 2010, Micromax had filed for a public listing but later shelved its plans citing poor market conditions.
"The funding would also boost development of new products and technology as this could help Micromax differentiate itself in the crowded smartphone market," the sources said.
Micromax's investors include TA Associates, Sequoia Capital, Sandstone Capital and Madison India Capital.
According to research firm Canalys, Micromax overtook Samsung (20 percent) as India's largest handset vendor with 22 percent of shipments in the October-December 2014 quarter.
The Korean firm has challenged the report.
Affordable handsets from homegrown firms, especially Micromax, is credited to have helped India become one of the fastest growing handset markets globally.
For smartphones too, affordable devices, especially those under Rs. 10,000 are driving the boom in the market, making it the world's third biggest market.