Equity · Investing

Tejas Network IPO

Open for Subscription till 16 June 2017

The company builds optical and data networking products for telecom companies, internet service providers, utility and defense companies, is asset light; the manufacturing is outsourced to reputed firms and has a 15% market share in the optical equipment market.


Its customers are distributed across 60 countries while 63% of its revenues comes from India. The company is focused on countries with economies similar to India such as Latin America, South East Asia, and Africa.

  • R&D lies at the core of the firm; they have filed 300+ patents across the world while 56 have been granted. This acts like a wide moat.
  • The company is not using the IPO proceeds to clear debt
  • Revenue is growing at a CAGR of 24% for the last four years.
  • Telcos must ramp up their infrastructure as 3G/4G data speeds and consumption increases and 5G is rolled out.


  • Client concentration: The company derives 58% of its revenue from just 5 customers.
  • Ongoing legal issues: the company has 40 tax proceedings against it for an amount of Rs 160 crores and another 19 crores in civil suits.
  • Currency risk: the company derives a third of its revenues in US dollars.

Our Take: We would recommend an investment in this IPO.



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