HONG KONG—Indian smartphone-maker Micromax Informatics Ltd. said Thursday it plans to start selling handsets in China next year and potentially go public in two years, as it looks to boost sales and generate cash to stay relevant in a fiercely competitive industry.

The company aims to become the world’s fifth-largest smartphone maker by number of phones sold by 2020, and can’t do that without access to Chinese consumers and more cash from a public offering or private investors, said Micromax co-founder Vikas Jain at the Rise...