Hero Electronix may sell up to 30% stake in semiconductor firm Tessolve

Hero Electronix is planning to sell a 25-30 per cent stake in Bengaluru-based semiconductor design and engineering company Tessolve. The move comes amid growing investor interest in the space, The Economic Times reported on Tuesday.

 

Backed by Suman Kant Munjal, the company is in the process of mandating an investment bank for the stake sale, the report added. Munjal is chairman of Rockman Industries, one of the oldest Hero Group companies that manufactures automotive components.

 

Tessolve, however, stated that it is not engaged in fund-raising talks. Through the potential deal, Hero Electronix aims to raise $120-150 million, valuing Tessolve at $400-450 million.

 

In 2022, Tessolve was valued at Rs 1,023 crore. Based on this information, Hero Electronix is seeking 20 times the financial year FY25 earnings before interest, taxes, depreciation, and amortisation (Ebitda), which is expected to be $20 million.

 

Tessolve co-founder and chief executive officer Srini Chinamilli told The Economic Times that the company was not holding any such talks as it is self-sufficient and has achieved a 20 per cent compound annual growth rate. He added that the company’s revenue stood at Rs 1,000 crore in the last financial year.

 

Hero Electronix acquired Tessolve in 2016, announcing investments of Rs 1,000-1,200 crore over the initial five to seven years.

 

Incorporated in 2004, Tessolve has been a prominent player in delivering projects for various semiconductor companies globally. With over 3,000 engineers, the company is known for its expertise in advanced semiconductor technologies, according to its official website.

 

With an aim to tap into India’s technology business segment, Hero Electronix has a presence in over 10 countries and more than 50 cities.