Tata Sons subsidiary Panatone Finvest Limited entered into an agreement with global optical, broadband and data networking products company Tejas Networks to purchased 43.3% stake for a total valuation of Rs 1,850 crore.
Panatone is Tata Sons’ investment arm and also the promoter entity of Tata Communications. Tejas Networks said Panatone and some other companies of the Tata Group would make a public announcement to acquire up to 40.3 million equity shares of Tejas Networks representing 26 per cent of the voting capital according to SEBI’s take-over regulations.
According to Tejas Networks statement, the company 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 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 to cater to this large market opportunity, and for other general corporate purpose,” it said in a statement.
Tejas Networks CEO and Managing Director Sanjay Nayak said 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,” said Sanjay Nayak.
Sanjay Nayak will continue as Managing Director and Chief Executive Officer to lead Tejas Networks along with the existing management team through the next phase of growth.