Tata dives into new biz with Tejas stake

Tata Sons Pvt. Ltd has agreed to buy a 43.35% stake in telecom gear maker Tejas Networks Ltd for ₹1,884 crore, as India’s biggest conglomerate attempts to build a networking equipment business to exploit the massive spending via carriers to build 5G organizations and curbs on Chinese vendors.

The transaction includes the sale of shares worth ₹500 crore and warrants worth ₹1,350 crore.

Tatas will own a 43.35% stake once the warrants are completely changed over into shares. Tata Sons will buy the shares and warrants at ₹258 each.

The Tata group also offered to purchase an extra 26% of Tejas Networks from public shareholders to comply with local takeover rules. Furthermore, Tata Sons will purchase shares worth ₹34 crore from four senior executives of Tejas. TATA venture comes all at once government is trying to promote local manufacturing of telecom gear through the production linked incentive scheme (PLI). The government has also mandated telcos to install equipment from trusted sources to prevent cyberattacks.