Tatas buy Tejas for ₹2.9k cr

Tata Sons is buying Tejas Networks, a publicly listed company offering data networking products to telecom operators and internet service providers for Rs 2,923 crore, to bolster its enterprise telecom play. According to the contours of the deal, Tata Sons is buying 72% in Tejas by subscribing to preferential shares and warrants besides acquiring shares from founders and public shareholders. It is purchasing Tejas shares at Rs 258 apiece, which is at a premium to its Thursday’s closing price of Rs 246 on the BSE.

After exiting the wireless services space in 2019 by transferring the business to Bharti Airtel, Tata Sons has been focusing on providing telecom services to enterprise customers. Tejas is Tata Sons’s first major deal in telecom after the exit from consumer mobile business. Currently, its telecom and connected interests are spread across Tata Communications, Nelco and Tata Teleservices.

Tejas was founded by three first-generation entrepreneurs — Sanjay Nayak, Arnob Roy and Kumar Sivarajan — in 2000 in Bengaluru. The company, which went public in 2017, posted a profit of Rs 38 crore on sales of Rs 527 crore in fiscal 2021. Tata Sons said Tejas’s existing management team will continue to lead the company even after the change in ownership. The founders own 5.6% in Tejas and their stake will reduce to 2.6% after the deal. The transaction will be done in multiple stages.

Interestingly, in the past, Tata Sons promoter Tata Trusts had partnered with Tejas to roll out public Wi-Fi hotspots in rural and semi-urban India.

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