Bangalore-based telecom equipment maker Tejas Networks Ltd made a tepid debut on the stock market on Tuesday with its shares listing at the initial offering price before marginally advancing.
Shares of Tejas began trading on the BSE at Rs 257 apiece, the same as the issue price, stock-exchange data showed. The shares rose to a high of Rs 271 apiece and closed at Rs 263.30, up 2.5%. The benchmark Sensex fell 0.6%.
The closing share price gives Tejas a market value of Rs 2,358 crore ($366 million).
Tejas, which is backed by various private equity firms, is the ninth company to list on the stock exchanges this year. Six of the previous eight companies gained on their market debut.
The muted debt of Tejas comes after its IPO was covered a tad less than twice the issue size due to a lack of enthusiasm among non-institutional investors.
The IPO size was Rs 776.68 crore for a 33.75% stake dilution on a post-issue basis. This included a fresh issue of shares worth Rs 450 crore. The remaining portion was an offer for sale of shares by founders and other shareholders including Frontline PE and Intel Capital. Frontline fully exited while Intel Capital sold part of its stake.
Ahead of the IPO, Tejas Networks had raised Rs 350 crore by selling shares to a bunch of anchor investors including Abu Dhabi Investment Authority, US-based private equity firm East Bridge Capital and PremjiInvest, the family investment arm of Wipro Ltd chairman Azim Premji.
Tejas Networks plans to use Rs 45.28 crore from the IPO proceeds toward capital expenditure needs such as payment of salaries and wages. It intends to use Rs 303 crore toward working capital requirement and an undisclosed amount for general corporate purposes.
Apart from Intel Capital and Frontline Strategy, the shareholders who sold their holdings in the IPO include Cascade Capital Management Mauritius, CEO Sanjay Nayak and CTO Kumar N Sivarajan.
Cascade Capital is believed to be controlled by Tejas co-founder Gururaj ‘Desh’ Deshpande, who had become a billionaire during the dotcom boom at the turn of the century. Deshpande is also the brother-in-law of Infosys co-founder NR Narayana Murthy.