Shares of Tejas Networks were locked in upper circuit of 5 per cent at Rs 246 on the BSE in Thursday's session after the company announced that Panatone Finvest Limited, a subsidiary of Tata Sons, will buy a 43.3 per cent stake in the telecom related services firm for Rs 1,850 crore.
The stock of Tejas Networks hit upper circuit for the fifth straight day. It was trading at its 52-week high level and has rallied 28 per cent in the past one week. In comparison, the S&P BSE Sensex was down 0.28 per cent during the same period. A combined around 55,000 equity shares have changed hands on the counter and there were pending buy orders for 6.37 million shares on the NSE and BSE as of 10:54 am.
Tejas Networks on Thursday announced that it has executed definitive agreements with Panatone Finvest Limited (“Panatone”). The company will allot 19.4 million equity shares at Rs 258 per share, aggregating to Rs 500 crore on a preferential basis.
The company will also allot 36.8 million warrants, each carrying a right to subscribe to 1 equity share at an exercise price of Rs 258 per equity share aggregating to Rs 950 crore, which may be exercised by Panatone in one or more tranches during the period commencing from the date of allotment of the warrants until the expiry of 11 months from the date of allotment of the warrant.
Panatone Finvest will acquire up to 1.3 million equity shares of the Tejas Networks from certain personnel in management at a price not exceeding Rs 258 per equity share, aggregating to Rs 34 crore, subject to such terms and conditions as mutually agreed between the parties, the company said. CLICK HERE FOR FULL PRESS RELEASE
Tejas Networks said it sees a very large opportunity in the telecom sector both in India and global markets with the new cycle of investments in 5G and fiber-based broadband rollouts. The company will utilise the proceeds raised from the preferential allotment to invest organically and inorganically in research & development, sales and marketing, people, infrastructure and to enhance its manufacturing and operational capabilities to cater to this large market opportunity, and for other general corporate purpose.
Panatone is Tata Sons' investment arm and also the promoter entity of Tata Communications.