Dwindling market share led to top-level exits at Micromax, again

The recent resignations by Micromax’s top executives may have evoked surprise. However, increasing pressure from competing brands and shrinking market share may have proved fatal for the company’s professional team. In the past four months, while several key professionals, the latest being the company’s Chief Executive Vineet Taneja, have put down their papers, exits en mass at Micromax are not unprecedented.

Micromax, the top Indian handset company which also features among the ten most sold handset brands in the world, has been in the news, at least since 2010, for frequent changes in its management. Many of which occurred due to difference of opinion between its co-founders (and owners) and the professional management team.

The latest exists started with its then chairman Sanjay Kapoor leaving the company in October, 2015. The company has been in turmoil ever since it first looked at going for an IPO in 2010 to sell 10 per cent stake in the company at a valuation of $1 billion. However, it withdrew the offer in July 2011. In October 2013, Deepak Mehrotra, the then CEO of Micromax, quit abruptly, followed by Ajay Sharma, who joined the company from HTC, who exited the company in January 2014.

During Kapoor’s exit in October last year, a difference of opinion with the company’s four promoters – Rahul Sharma, Rajesh Agarwal, Vikas Jain and Sumeet Arora – came out in the open. The company’s shrinking share in the domestic smartphones market led to bitterness between other professionals, such as Taneja. In the September quarter of 2014, while Micromax had a share of 20 per cent, its share has plunged to 16.7 per cent in the same quarter in 2015. Meanwhile, its Indian peer Intex has gained significant market share. From less than five per cent in September quarter, 2014 to 10.8 per cent in same quarter 2015.