Your company just completed a successful IPO in India raising Rs 450 crore in primaryissuance. The issue received strong institutional interest from Indian as well asInternational investors. This is a major milestone for a company which started in theyear 2000 with a meagre capital but a very ambitious vision- to build a world-classtechnology product company from India. The success of Tejas signifies the emergence ofinnovative new-generation deep-technology product companies from India which are drivenby first-generation entrepreneurs. It is also a significant milestone for the start-upecosystem in India since Tejas has set an example for early investors to get significantfinancial returns thereby improving the overall investment climate in the country forstartups.
Tejas Networks offers state-of-the-art products for the high-growth segment of thetelecom market which is for creating high-speed data networks to cater to theever-increasing demand for bandwidth. Factors like the evolution of new high-speedinternet technologies increased consumption of video content and the proliferation ofaffordable smartphones are primarily driving this increasing bandwidth demand. Besidesgrowth in enterprise data services cloud-based applications and data centers furtherincrease the data consumption across global markets. These trends require telecom serviceproviders and government entities to make significant capital expenditure in buildinghigh-capacity optical transmission networks that are built using products designed andmanufactured by Tejas.
India too is going through a digital transformation and the Government of India has aflagship program of "Digital India". Government is making significantinvestments in increasing the country's broadband infrastructure through projects such asBharatNet which will provide us significant growth opportunities. In addition policieslike "Make in India" and "Preferential Market Access" (PMA) willbenefit us since they are targeted towards encouraging indigenous technology and use ofdomestically manufactured products like ours. Besides with the advent of high-speednetworks and increased use of data private telecom operators in India need to invest inoptical networks to upgrade their network capacities to stay competitive. To retain andgrow their market it is imperative for telecommunication service providers to ensure thatthey connect a majority of their cell tower on optical fiber so that they can cater tothe ever-increasing demand for data and bandwidth.
Internationally in emerging markets the state of digital infrastructure economicaffordability trends of data growth and need for technology are similar to India. We aretaking our success in India into "India-like" markets in South-East Asia Africaand Latin America. Customers in these countries highly value our experience in India andwe have seen a strong demand for our products and solutions in these countries. Inaddition we are able to leverage our strong OEM partners in USA who sell our products totheir customers across the world.
At Tejas we are well poised to capitalise on these rising industry trends. Ourend-to-end portfolio of optical networking products for access metro and long-haulnetworks help us leverage the expected growth in optical networking capex-both in India aswell as internationally. Today we are ranked as the sixth largest supplier in the globaloptical aggregation segment and we are growing faster than the market.
Over the years we have built a reputation for delivering technologically advanced andhigh-quality products that are backed by our reliable customer service team. We are theonly India-based optical transmission systems company that is TL9000 certified. We haveconsistently achieved field uptime exceeding 99.999% since 2008. We share long-termrelationships with all our customers with 88% of our business during last year comingfrom existing customers and most of our top customers have been with us for more than adecade.
Our products are used to build communication networks that carry voice data and videotraffic from fixed line mobile and broadband networks over optical fibre. They are basedon global technology standards which enable telecommunications networks that are used toprovide mobile internet and broadband services primarily over optical fibre.
Our products utilise a programmable software-defined hardware architecture whichallows us to easily customize our products to meet new standards as well asmarket-specific requirements of features and performance. This has enabled us to deployour products worldwide - in India the emerging markets as well as the developed markets.Our optical networking products can be flexibly configured as CPO PTN and DWDM productsas per the communications service provider's needs and traffic requirements in theirnetworks. We also offer broadband access products based on GPON technology forFiber-to-the-home (FTTX) applications. We are also investing in new wireless broadbandaccess products based on 4G/LTE technology and enterprise ethernet switches. Besides weprovide intelligent network management software for easy deployment of large-scalenetworks.
Developing optical and data networking products requires large number of skilledR&D professionals across multiple domains deep technology knowledge and significantup-front investments as well as long gestation period. This creates very high entrybarriers for a new competitor.
Tejas lies right at the intersection of the key Government of India initiatives such as"Make in India" "Digital India" and "Start-up India". Ourinnovative product and talent helps us to be invaluable partner to the government'sinitiative to create a "New India".
Going forward we aim to invest in expanding our product portfolio and to increase oursales and marketing presence especially in international markets. We expect ourperformance to gain momentum in India as well internationally as the demand forhigher-speed data networks continues to increase.
We are grateful to our customers employees shareholders suppliers andbankersall of whom are critical to our success. We see significant opportunities forgrowth over the next several years and we look forward to the next stage of our journeytogether.
We thank the government of various countries where we have our business operations. Wealso thank the Government of India particularly the Ministry and Department ofElectronics and Information technology the Ministry of Commerce the Ministry of Financethe Ministry of Corporate affairs the Customs and Excise departments the Income Taxdepartment Reserve bank of India Karnataka State Government and other Governmentagencies for their support and look forward for their continued support in future.
| ||Warm regards |
|Bengaluru ||Balakrishnan V. |
|August 26 2017 ||Chairman |