Atas to buy majority stake in Tejas
A arm will invest 84 crore in Tejas works, giving it a 35% stake in firm
Homegrown telecom ork gear maker Tejas Netks Ltd on Thursday said its board had approved the ance of equity shares and ants to Tata Sons’s subsidifor an investment of ₹1,884 e. e transaction, when wars are fully converted to es, will give Tatas a 43.35% eholding in the company, ng them in control. tas have announced an offer to buy another 26% e company’s shares from ic shareholders, in compliwith Sebi’s takeover code. l the above share and warpurchases will be done at a of ₹258 apiece. e transaction involves an ment of shares worth ₹500 e and allotment of warrants h ₹1,350 crore. In addition, s will also acquire shares h ₹34 crore from four senxecutives of the company. jas Networks will utilize proceeds raised from the erential allotment to invest organically and inorganically in the research & development, sales and marketing, people, infrastructure and to enhance its manufacturing and operational capabilities to cater to this large market opportunity, and for other general corporate purposes.
“We are excited to partner with Tejas Networks, India’s leading telecom and network company with a strong DNA of R&D. We look forward to working with the highly experienced management team of Tejas Networks
and creating a full stack of globally competitive wireline and wireless products,” said Saurabh Agrawal, Executive Director of Tata Sons Pvt. Ltd.
The investment by Tatas comes at a time when the Indian government is trying to promote domestic manufacturing of telecom gear through the production-linked incentive scheme as well as through mandating the new installation of so-called trusted products from trusted sources through the creation of the Trusted Telecom Portal launched last month.
In February, the government had approved the PLI scheme for telecom gear manufacturing comprising an outlay of ₹12,195 crore over the next five years.
The scheme covers core transmission equipment, 4G/5G and next-generation radio access network and wireless equipment, access and customer premise equipment (CPE), Internet of Things (IOT) access devices, and enterprise equipment such as switches and router.
Tejas Networks has submitted PLI application under telecom and networking equipment category, the company said in its latest investor presentation for Q1 FY22 adding that its products are under approval as “secured telecom equipment”, under the government’s Trusted Telecom Portal of National Security Council Secretariat
Current managing director and chief executive Sanjay Nayak shall continue to lead Tejas Networks along with the existing management team through the next phase of growth.
“Tejas Networks was started with a vision of creating a toptier global telecom equipment company from India. The association with Tata group will accelerate the realisation of this vision and enable us to address the large market opportunity available to us to build a financially strong global company, backed by a trusted brand,” said Sanjay Nayak, chief executive officer (CEO) and Managing Director at Tejas Networks.
Kotak Mahindra Capital Co. Ltd is acting as the manager to the open offer and Khaitan & Co is acting as the legal advisor to the transaction.
Tejas Networks designs, develops and sells high-performance networking products to telecommunications service providers, internet service providers, utilities, defence and government entities in over 75 countries.
For the financial year 2021, the company reported a revenue of ₹514.8 crore, a growth of 35.6% over the previous year. Profit for the fiscal stood at ₹37.5 crore, compared to a loss of ₹167.3 crore.
In Q1 FY22, Tejas derived 52% of its revenues from international markets, 35% from the domestic private market and 13% from government PSU orders.