Saurabh Agrawal, Executive Director of Tata Sons Private Limited, said “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.”
V Balakrishnan, Chairman of Tejas Networks, said “We are delighted about our association with the Tata group, which has a long history of building highly successful global businesses of scale. This association provides us the necessary financial resources, global relationships and strong ecosystem to innovate and scale our business.”
Sanjay Nayak, CEO and Managing Director at Tejas Networks said “We are privileged to be part of the Tata group, which has a rich legacy as India’s most visible and trusted business brand. 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, backed by a trusted brand. I am fully committed to making this a success and am excited about the next phase of our journey."
As per the regulatory filing, the agreement involves:
1. Preferential allotment of 1.94 crore equity shares at a price per equity share of Rs258 per share aggregating to Rs500 crore;
2. Preferential allotment of 3.68 crore warrants, each carrying a right to subscribe to 1 (one) equity share at an exercise price of Rs258 per equity share aggregating to Rs950 crore, which may be exercised by Panatone in one or more tranches during the period commencing from the date of allotment of the warrants until expiry of 11 (eleven) months from the date of allotment of the warrants;
3. Preferential allotment of 1.55 crore warrants, each carrying a right to subscribe to 1 (one) equity share at an exercise price of Rs258 per equity share aggregating to Rs400 crore, which may be exercised by Panatone in one or more tranches during the period commencing from the expiry of 12 (twelve) months from the date of allotment of the warrants until the expiry of 18 (eighteen) months from the date of allotment of the warrants;
4. Acquisition of up to 13 lakh equity shares of the Tejas Networks from certain personnel in management, at a price not exceeding Rs258 per equity share aggregating to Rs34 crore, subject to such terms and conditions as mutually agreed between the parties;
Further, Panatone and other certain companies of the Tata group would 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.
Also, in the deal, Sanjay Nayak shall continue as Managing Director and Chief Executive Officer to lead Tejas Networks along with the existing management team through the next phase of growth.
Tejas Networks sees a very large opportunity in the telecom sector both in India and global markets with the new cycle of investments in 5G and fiber-based broadband rollouts. Tejas Networks will utilize the proceeds raised from the preferential 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 purpose.
The preferential allotment of the equity shares and warrants has been approved by the Board of Directors of Tejas Networks and the transactions are subject to shareholders’ approval and other customary closing conditions and approvals.
Kotak Mahindra Capital Company Limited is acting as the manager to the open offer and Khaitan & Co is acting as the legal advisor to the transaction.
On Sensex, Tejas Networks closed at new 52-week high of Rs246 per piece up by 4.99%. The stock level is also the upper circuit currently.