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Tata Sons subsidiary to acquire 43.3% stake in Tejas Networks for ₹ 1,850 crore

Shares of Tejas Networks on Thursday jumped 5% to hit its upper circuit after the telecom and network firm said an arm of Tata Sons will acquire controlling stake in it for nearly Rs 1,890 crore in a multi-step deal.   | Photo Credit: Getty Images/iStockphoto

Tata Sons subsidiary, Panatone Finvest Limited has signed a definitive agreement to pick 43.3% stake in Bengaluru-based telecom equipment firm, Tejas Networks, for ₹1,850 crore.

Tejas Networks designs develops and sells networking products to telecommunications service providers, internet service providers, utilities, defence and government entities.

The company would utilise the proceeds raised from the preferential allotment to invest organically and inorganically in the research and development, sales and marketing, people, infrastructure and to enhance its manufacturing and operational capabilities, as per a regulatory filing on Thursday.

The agreement between Panatone and Tejas Networks included a preferential allotment of 1.94 crore equity shares at a price per equity share of ₹258 per share aggregating to ₹500 crore. It also included a preferential allotment of 3.68 crore warrants, each carrying a right to subscribe to 1 equity share at an exercise price of ₹258 per equity share aggregating to ₹950 crore. This may be exercised by Panatone in one or more tranches during the period starting from the date of allotment of the warrants until the expiry of 11 months from the date of allotment of the warrants, as per the filing.

Further, a preferential allotment of 1.55 crore warrants, each carrying a right to subscribe to 1 equity share at an exercise price of ₹258 per equity share aggregating to ₹400 crore. This may be exercised by Panatone in one or more tranches during the period commencing from the expiry of 12 months from the date of allotment of the warrants until the expiry of 18 months from the date of allotment of the warrants.

The agreement also included the acquisition of up to 13 lakh equity shares of the Tejas Networks from certain personnel in management, at a price not exceeding ₹258 per equity share aggregating to ₹34 crore.  

“Tejas Networks was started with a vision of creating a top-tier 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,” said Sanjay Nayak, CEO and MD, Tejas Networks.

Commenting on the development, Saurabh Agrawal, Executive Director, Tata Sons said “We look forward to working with the management team of Tejas Networks and creating a full stack of wireline and wireless products.”

Panatone and other certain companies of the Tata group would also make a public announcement to acquire up to 4.03 crore equity shares of Tejas Networks representing 26.00% of the emerging voting capital in accordance with SEBI Takeover Regulations.

Mr. Nayak will continue as the Managing Director and Chief Executive Officer of Tejas Networks along with the existing management team. 


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Printable version | Sep 18, 2021 8:17:23 AM | https://www.thehindu.com/business/tata-sons-arm-to-acquire-controlling-stake-in-tejas-networks-for-nearly-rs-1890-cr/article35600606.ece

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