The group, which owns Tata Communications as well as steel, food, cars – including Jaguar Land-Rover – and chemical businesses, will take 43.3% stake in Tejas for 18.5 billion rupees.
Tejas CEO Sanjay Nayak (pictured) 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.”
Tejas Networks said in a statement that it “sees a very large opportunity in the telecom sector both in India and global markets with the new cycle of investment in 5G and fibre-based broadband roll-outs”.
It plans to use the proceeds from the Tata investment “to invest organically and inorganically in research and development, sales and marketing, people, and infrastructure and to enhance its manufacturing and operational capabilities to cater to this large market opportunity, and for other general corporate purpose.”.
Nayak added: “I am fully committed to making this a success and am excited about the next phase of our journey.”
Tata is doing the transaction via its Tata Sons subsidiary and Tata Sons’ unit Panatone Finvest, which has signed a binding agreement. The deal will trigger an open offer for a further 26% stake in the company from the public, the two companies said in a joint statement.
Tejas has a number of significant contracts outside of India. In May Zimbabwe’s TelOne hired it to build a 100Gbps fibre network to improve bandwidth to customers.
In April Mexico’s GigNet said it is to use optical networking and broadband access products from Tejas Networks for its high-capacity fibre optic network expansion in the Cancun region.
Last year another Mexican company, C3ntro Telecom, contracted Tejas to upgrade its high-speed backbone and broadband network.
