Why have Tatas acquired a stake in Tejas Networks?

The stake in Tejas is being acquired by Panatone Finvest, a subsidiary of Tata Sons. Panatone is the same company that bought a stake in VSNL, when the Tatas acquired the stake. Panatone has signed a deal to acquire 43.3% stake in Tejas Networks For Rs.1,850 crore. Tejas Networks designs and develops networking products for telecoms, ISPs, utilities, defence and the government.

For the Tatas, it gives them an expansion of their portfolio of telecom infrastructure to peg with Tata Communications. Tejas will use the proceeds from the preferential allotment to expand its business organically as well as through mergers and acquisitions. Tejas will allot 1.94 crore shares at Rs.258 per share aggregating up to Rs.500 crore plus warrants.