VCCircle

The investment comes out of India Industrial Growth Fund (IIGF), a $200 million fund launched in 2007 on SMEs.

Private equity firm Frontline Strategy Ltd has made an investment in Tejas Networks Limited, an optical networking equipment manufacturer in India. The investment comes out of India Industrial Growth Fund (IIGF), a $200 million fund launched in 2007 focusing on growth sectors and small and medium enterprises (SMEs).  The fund's other investments are Krishna Saa Fabs Pvt Ltd (a galvanizing/structural engineering firm) and Shriram SEPL Composites Pvt Ltd (a manufacturer
of glass reinforced polyester composite pipes).

Frontline has picked up the stake through a secondary transaction. In the issued release the firm did not mention the deal size or from which shareholder of Tejas the stake was bought. Tejas has raised private equity funding from investors like Battery Ventures, Cascade Capital Management (investment arm Gururaj Deshpande, co-founder and chairman of Sycamore Networks), Mayfield Fund, Intel Capital, Goldman Sachs and Sandstone Private Investments.

Tejas Networks is an enabler of telecom infrastructure by developing carrier class  communications equipment. The company has raised around $70-75 million in funding, and investors reportedly hold nearly a 50% stake in Tejas. Tejas recorded revenues of Rs 234 crore in FY07, up from Rs 128 crore in FY06 and Rs 47 crore in FY05. The company was founded in 2000 by four technology professionals — Sanjay Nayak, Kumar N Sivarajan, Arnob Roy and Deshpande. Tejas was planning to for a public offering before the market crash.

Frontline Strategy has been making private equity investments since 2000. Some of its investments include CBay Systems, Astra Microwave, Titagarh Wagons, among others. IIGF is sponsored by Madrid-based non-resident Indian Harish Fabiani. Through different investment vehicles, the Fabiani family has invested in companies like Edelweiss Capital Ltd, Indiabulls Financial Services Ltd and Nimbus Communications.