Homegrown Indian mobile phone firm Lava will launch 4G feature phones as it aims to corner a third of the market share for the entry-level devices within a year, while also gradually boosting its budget smartphones, a top executive said.

Since it was set up in 2009, Lava has become popular for the budget phones, which have a keypad but no high-end features.

The company will launch 4G feature phones in the effort to take its market share in the segment to 35% within a year, up from 26% now, said Sunil Raina, the president and business head of Lava International.

The firm wants to "come to a very dominant position" in this segment, he told Reuters in an interview.

Research firm Counterpoint estimates that Lava has a share of less than 1% in the world's second-biggest smartphone market, with 650 million such devices.

Despite Indians' growing use of smartphones, Counterpoint estimates roughly 290 million of the population still uses feature phones.

Billionaire Mukesh Ambani's telecom arm recently launched a device in the category, offering services such as digital payments.

Lava also plans to boost its smartphone offerings in the budget segment. In the next two years, it aims to exceed a 10% share of the market for smartphones costing less than 30,000 rupees ($360), from about 1% to 2% now, Raina said.

All the firm's smartphones will be 5G, or next-generation, supported by next year, he added.

"We believe we can be quite a significant player in this (budget) segment," Raina said, adding that phones costing less than 30,000 rupees ($360) would still form more than 40% of an estimated $72 billion smartphone market in India by 2028.

"It does not mean that we don't want to go above 30K ... We are building our capabilities step by step".

Lava's strategic bet on the affordable category runs counter to moves by top players Samsung and Xiaomi , which increasingly offer premium smartphones as Indians upgrade their devices.

In recent years, Lava has moved all its design and manufacturing operations to India from China.

While it shelved a plan for an initial public offer in 2021, Lava is eyeing a listing down the road as it builds out the smartphone business, Raina added. (Reporting by Munsif Vengattil in Bengaluru; Editing by Aditya Kalra and Clarence Fernandez)