Private equity firm Frontline Strategy Ltd has increased its holding in Tejas Networks Limited, an optical networking equipment manufacturer. Frontline’s India Industrial Growth Fund Limited (IIGF) has picked up a 2.44% stake from Nortel Networks Mauritius Ltd in a secondary transaction in the Bangalore-based firm.
The deal is the second time Frontline Strategy has picked up stake in Tejas, with first tranche coming in August 2009.
Tejas Networks in June this year acquired Israel’s Ethos Networks, which specialises in carrier ethernet and network management products. Tejas was founded in 2000 and reportedly had revenues of Rs 600 crore for FY10.
Tejas Networks was founded by four technology professionals — Sanjay Nayak, Kumar N Sivarajan, Arnob Roy and Dr. Gururaj “Desh” Deshpande. Tejas was planning to for a public offering before the market crash in 2008.
Tejas has raised funding from more than half a dozen investors including Battery Ventures, Cascade Capital, Mayfield Funds, Intel Capital, Goldman Sachs and Sandstone Private Investments.
This is the third investment by Frontline Strategy’s IIGF. Its other deals include Krishna Saa Fabs Pvt Ltd (a galvanizing/structural engineering firm) and Shriram SEPL Composites Pvt Ltd (a manufacturer of glass reinforced polyester composite pipes).
Supratim Basu, director at Frontline Strategy, said his firm is looking at deals in sectors like industrial, technology and infrastructure. Frontline is also raising its third fund, for which its targeting $150 million.
“We have exited most of our investments from the first fund. There are two or three investments which will be mega exits over the next nine months,” said Basu.