Tejas IPO may value co at Rs 2.4k cr

Bengaluru: After eight years, telecom hardware company Tejas Networks has revived its IPO plan.

The Bengaluru-based firm is looking to raise close to Rs 800 crore and has appointed Axis Capital, Citibank, Edelweiss and Nomura as bankers for the IPO, sources close to the development said. The IPO is expected in January-February and is likely to value the firm at Rs 2,400 crore. When contacted, the company declined to talk about the matter.

Tejas had abandoned the IPO plan following the global financial crisis and a series of developments, including the 2G scam, that brought its revenue down to a third from its peak.

Tejas was founded in 2000 by technology professionals Sanjay Nayak, Kumar Sivarajan and Arnob Roy with capital investment from Indian-American entrepreneur, investor and philanthropist Gururaj Deshpande. It was one of the early technology product ventures out of India, and an ambitious one, considering it was in a field dominated by the likes of Cisco. It focused on optic fibre, which was emerging as the preferred solution for high bandwidth requirements and it is said to have been the first in the world to come up with a single network for both voice and data based on a global standard.

Combined with lower costs, Tejas had an immediate advantage with customers. The company’s promise also drew in a slew of investors, including Battery Ventures, Intel Capital, Samena Capital, IL&FS, Goldman Sachs, Sandstone Capital and SUN Technologies. By 2008, its revenue had touched close to Rs 600 crore. But then, its biggest customer, Nortel got into trouble. The global financial meltdown worsened Nortel’s woes and it went down completely. Shortly after came the 2G scam in India that forced Indian telecom operators to put off all equipment purchases. This brought Tejas almost to its knees. By 2012, revenue was down to about Rs 200 crore.

But the company continued to invest significantly in R&D. And despite intense competition from the likes of Huawei, Tejas has managed to hold its own. Last year, its revenue was back to where it was at its peak in 2008. The government’s ‘Make in India’ and Digital India initiatives are expected to provide greater momentum in the coming years. Sources told TOI that the funds from the IPO will be used to clear debts and also to strengthen international marketing. Tejas is already present in some 70 cities, and the global opportunities are seen to be significant.

Not all of the funds from the IPO will come into the company. Some early investors are expected to sell a part of their holdings.