Tejas Networks Limited IPO Message Board (Page 22)

Tejas Networks IPO
GMP 29 – 30

Tejas
Not much GREY activities

septa sir,eagleyeji,uchit sir

what about your view from tejas after lot of negetive comments ..

Viraj

Take the balance sheet, a pen, a paper and a calculator. Do your own analysis. Why you need an expert. Be yourself and stand on your own.

Else you can never make money in equities.

Or else become GMP analyst in this forum and get praises from newbies who beg for tips.

Always follow simple principle of Warren buffet. Don''t go for stock where u think technology change can affect it''s performance. It is quite clear 60 pc of their revenues are from bank,airtel airtel etc. In future all telecom are going to be slow on investment. Moreover it''s highly competitive line. Avoid simply. Why can''t people look at consumer driven stocks instead. IT and telecom related stock should anyway be avoided.

Intelligent investors have understood what you have to say.

But only 10 % are intelligent.
Rest all will get after you.

They have fixation with GMP.
Let them loose money.

So relax and be happy. Let individuals take their own decision.

I am avoiding this confusing "Optical networking products" company with hard to understand balance sheet.

32 premium

OFFER PRICE IS HIGH. AVOID THIS IPO. S.CHAND BHI OVERSUBSCRIBE HOOAA THA AUR USKA GREY MARKET PREMIUM BHI RS. 70-90 CHAL RAHA THA. C.L. EDUCATE KA GRAY MARKET PREMIUM RS. 60 CHAL RAHA THA. PAST ME QUICK HEAL KA GRAY MARKET PREMIUM RS. 60 CHAL RAHA THA. YE SAB STOCK KI PRICE AAJ IPO OFFER PRICE SE DOWN ME CHAL RAHI HAI. SO TAKE CARE

Gururaj Deshpande(Cascade Capital Management) is fully exiting this company via OFS.

Deshpande is NOT exiting fully...
His company (Cascade capital) is selling 24% of its stake (5.33 lakh out of 21.8 lakh shares owned by it)

Tulsian''s analysis is dot on. Here is more from a very authentic source (read employee..) :

Tejas has been trying to go for IPO since 2008 (they nearly did then..). However the revenues of all optical gearmakers are lumpy - depends a lot on a very few players (as highlighted by Tulsian).
This is not just a problem with Tejas - but has been a problem with ALL optical gearmakers. Optical gear space has become a low margin commodity h/w space.

Back in 2008, nearly 75% of the revenue was BSNL and that evaporated in 2009 leading to massive overhang of inventory which the management kept showing on its books for years (without depreciation !!).

The management of this company is not an ethical one, including Gururaj Deshpande. They have in the past played every trick in the book to deny/delay employee salaries (variable components, bonus etc).

Gururaj Deshpande is a multi-millionaire product of dot-com boom where every founder made millions/billions. He and his related firms have been the primary shareholders in this company (at next to zero value of shares) and they have been desperately looking for an exit for nearly a decade now.
Tejas raised money in the past from Goldman Sachs who they were never able to provide an exit. GS was very upset about not being provided an exit for many years and eventually ended up selling its stake at a loss to another share holder.

To estimate the long term wealth generation from any optical gear company one should look at the charts of Ericsson, Ciena, Infinera, Cisco etc. All these optical gear companies have seen super massive growth in data usage in the western markets and yet have struggled to create any wealth for the share holders.

Please keep in mind, which many do not know, technologically Tejas is atleast 5 years behind any of its western counterparts - they primarily operate in the metro gear space while the rest of western counterparts are vertical solution providers (Long haul, core, metro and data centre interconnects).

Tejas in the past has burned a lot of good money (hundreds of Crs)on products where they could never have any market footprint - carrier ethernet, wireless. Wireless gears from tejas never took off from the labs literally. Many of them were technologically inferior to the competition and could not scale.

While chinese gearmakers (Huawei, ZTE) are barred from operating in western/european markets - they have a substantial presence in India and has been the primary choice of the telecom service providers. They are fiscally and technologically superior to Tejas by miles.

Tejas solely relies on measures such as preferential allocation and make in India to sell its products - NOT on technical merit.

Most of its patents (90%+) are technologically irrelevant and outdated - have been filed in a hurry in the last 3-4 years to give a semblance of some IP ownershipaa.
The only IP that they have is an inhouse 100 Gig transmission (IP) and some stone-age SONET/SDH technology based IPs.

If possible have a look at Tejas''s revenues over the last 10 years instead of the last 3 yrs and you will see an interesting pattern.

The internal preferential allocation to investors happened at 125 a few months back and the internal consensus was ~200. 250 is a stretched valuation primarily riding on the midcap mania to provide a good exit to the employees (selling 20% maximum limit) and other shareholders.

HAD IT NOT BEEN FOR SEBI LOCKIN FOR EMPLOYEES - ALL THE EMPLOYEES AND HOLDERS WOULD HAVE EXITED EN MASSE AT THESE VALUATIONS. MOST OF THEM FEAR THAT THEY WILL NOT BE ABLE TO EXIT AT THESE VALUATIONS (ONE YEAR FROM NOW, ONCE LOCKIN EXPIRES)..

IPO Analysis: Tejas Networks

Verdict: Weak Network, Avoid!



Tejas Networks is entering the primary market on Wednesday 14th June 2017 to raise Rs. 450 crore, via fresh issue of equity shares of Rs. 10 each and an offer for sale (OFS) of upto 1.27 crore equity shares by PE investors and senior management, both in the price band of Rs. 250 to Rs. 257 per share. Representing 33% of the post issue paid-up share capital, issue will raise Rs. 776 crore at the upper end, of which, OFS portion is worth Rs. 326 crore. Issue, closing on Friday, 16th June, has a low retail portion of 10%, against the regular 35% portion size, substituted by higher QIB share of 75%. Listing on the bourses is expected on 27th June.



Bengaluru based Tejas Networks supplies optical and data networking products to telcos, internet service providers, utility and defence companies in over 60 countries, with exports accounting for a third of its Rs. 880 crore topline. Since company has outsourced major manufacturing functions, it follows an asset light model. However, of the funds deployed worth Rs 940 crore (networth Rs. 500 crore and total liabilities Rs. 400 crore), majority is towards working capital (Rs. 650 crore total current assets), which is not a very healthy trait for any business. A look at the financials throws up humongous outstanding debtors at nearly 5 months of sales, whereas inventory is also high at close to 3 months outstanding, despite enjoying flexibility of outsourced manufacturing.



While it positions itself as an R&D (51% staff strength) and technology company (to have premium multiples of a product company, anyway!), it has written-off significant chunk of intangibles in the past - Rs. 30 crore in FY17 and Rs. 39 crore in FY13. This is quite meaningful, given the low base – total intangibles of Rs. 83 crore (31-3-17), de-grown from Rs.134 crore (31-3-13), over 3 years.



Company’s business model is not comforting enough -

High client concentration risks, as 60% business generated from top 5 customers like BSNL, Bharat Broadband (GoI), Bharti Airtel, Aircel, Tata Comm.
45% of FY17 sales were to PSUs. Hence strain on working capital is likely to continue.
Return ratios – both RoCE and RoNW – are in low-teens – 12.6% for FY17.


Neither are the objects of the issue too convincing. Of the Rs. 450 crore fresh issue size, Rs. 303 crore will be allocated towards working capital (yes further!), Rs. 45 crore will be used as R&D staff salary (despite 31-3-17 balance showing cash and equivalents of Rs. 71 crore), while balance Rs. 102 crore (representing 23% of gross inflow) will go towards issue expenses and general corporate purposes, which are not productive means to utilize funds. Anecdotally, it is an R&D company, without having money to pay its R&D staff!



Coming onto the financials, FY17 consolidated revenue stood at Rs. 878 crore, with EBITDA of Rs. 174 crore, translating into EBITDA margin of 19.8%. While topline has grown at 24% CAGR since FY13, growth was not linear, with FY15 topline contracting 9% YoY, with similar fate of bottomline. FY13 PBT of negative Rs. 79 crore rose to Rs. 3 crore profit in FY14, dropping to Rs. 18 crore loss in FY15, which rose to Rs.29 crore in FY16 and finally to Rs. 64 crore in FY17. Such fluctuations in financial performance does not post a sound picture of company''s fundamentals. EPS for FY17 came in at Rs. 9.40, vis-à-vis Rs. 4.36 for FY16. As of 31-3-17, networth stood at Rs. 501 crore, while total debt was at Rs. 255 crore, besides cash balance of Rs. 71 crore.



Interestingly, there is no identifiable promoter in the company and 100% is held by ‘public’ category shareholders. Those participating in the OFS include Cascade Capital Management (Narayan Muthy’s brother-in-law Gururaj Deshpande), Intel Capital, PE firm Frontline (India Industrial Growth Fund), besides few of the senior management. While Frontline is fully exiting via the OFS, others are making a part exit.



At Rs 257 per share, company’s market cap will be Rs. 2,350 crore while EV will be Rs. 2,536 crore, which discounts historic FY17 performance by a PE multiple of 27x and EV/EBITDA multiple of 14.6x. Estimating 20% growth in FY18, PE and EV/EBITDA mutiples are 19x and 12x respectively, which is quite stretched. On Rs.1,000 crore topline, sales multiple of 2.5x for actually a software cum hardware company is quite steep! While the company does not have strict listed comparable, smaller peer D-Link, being an MNC enjoying debt free status, is ruling at FY17 sales multiple of 0.45x, EV/EBITDA multiple of 11x, and PE of 18x. Tata Group’s smaller IT networking company Nelco is also ruling at FY17 EV/EBITDA multiple of 10x and sales multiple of 1.3x. Thus, Tejas Networks IPO is steeply priced, in addition to a weak balance sheet.



Citing poor fundamentals and expensive valuations, avoid this IPO.



Disclosure: No Interest.

Dear NRIINVESTOR,
If you copy pasting somebody else''s analysis, you must mention and acknowledge the same in your post. You have just copied word by word from Mr. S.P. Tulsian website.
You must mention the source from where you have copied.

Tejas network has lowest profit margin in industry. Very bad. It has pending legal cases. Very very bad. It is not debt free like dlink.very very bad. It''s promoter last company in similar industry after growth became bankrupt.very very very bad .all these things will play in people mind and everyone will look for exit on day 1 as they are thinking of listing gain which would never be there. Avoid this ipo. It''s not even priced well and is too expensive. Do remember their financial history is not stable unlike other companies.stay away and don''t put ur hard earned money to be trapped for long

It may list with premium of 20+ Rs

ANY KOSTAK ????????????

Tejas Networks IPO Review: Should you invest?

Globally, data usage has been growing steadily year after year and the trend appears unlikely to reverse anytime soon. According to some forecasts, rising smartphone penetration and a massive increase in data traffic will lead global optical capital expenditure to grow from USD14.6 billion in 2014 to USD17.9 billion in 2020. The situation is not very different in India where expenditure on optical equipment is expected to grow from USD391 million in 2014 to USD869 million by 2020. This translates to average growth rate of 14.2%.

In its red herring prospectus, the company states that less than 20% of cell towers in India are connected on fibre, as compared to 70-80% in developed countries. There is simply no doubt that network operators in India have been behind the curve in terms of investing in optical fibre transmission when compared to their peers in China and the United States. However, the situation is going to change now as rising smartphone usage fuels data demand. This should be a tremendous business opportunity for companies like Tejas.

Apart from fundamental checking, investment in the IPO is also a function of valuations. Going by its FY2017 earnings, Tejas Network’s earnings per share (EPS) stood at INR9.4 which values the IPO at a price by earnings (P/E) ratio of 27.3 at the upper end of the price band. It is also noteworthy that Tejas has no listed peer to compare these figures. Nevertheless, considering the positive outlook of the industry, Tejas Networks’ leadership and its improving financial performance, this valuation doesn’t appear too high. However, as Sycamore’s fate tells us, one shouldn’t be complacent in technology space for too long. As a result, it is the kind of stock in your portfolio you might want to keep an eye always.

Overall, Tejas Networks IPO review reveals the company may be a good play on India’s growing data demand.

Tejas Networks IPO
GMP 39 – 40

PRECISION CAMSHAFT, S CHAND KI TARAH HOGA. LISTING KE BAAD BHI NEECHE HI JAYEGA,
HIGH SUBSCRIPTION HO YA NA HO. JUST AVOID

SAME BUSINESS SYCAMORE MEIN gURURAJ dESHPANDE KI investment thi jo ab bankrupt hai aur similar business mein thi

not sure why people are gving good reviews of its promoters whose last investment went bankrupt

look at good management Ramesh Damani invetsment, that is the man to be your idol and Guru

Avoid

The National Stock Exchange (NSE) of India Ltd on Friday said it has received regulatory approval to appoint Vikram Limaye at the helm of the country’s largest bourse by trade volumes and market share.
The approval comes four months after NSE announced it had selected the IDFC Ltd chief for the top job at the exchange for five years. Limaye’s appointment is likely to help NSE fast-track the listing process for its planned Rs 10,000-crore initial public offering (IPO).

As a matter of fact, where the rating agency rates any IPO under "Neutral Assessment", the investor feel hesitate to invest and these IPO really does not perform any listing gain rather listing loss rests in hand of Investor, where investor sells shares on day of listing.

Tejas Networks Limited is exporter of data networking product as engaged in a industry which is at growth stage. If shares list below the issue price, then also there is huge chances of profit (atleast 20%), if investor holds shares for the period of 1-2 months from date of listing.

Investor are guided not to bid in this IPO for the purpose of listing gain only.

IPO NOTE:

Tejas Networks IPO – Schedule – Page #386 of RHP

13th June – Anchor List
14th June – Offer Opens
16th June – Offer Closes
21st June – Finalisation of Basis of Allotment
22nd June – Unblocking of ASBA
23rd June – Credit to Demat Accounts
27th June – Listing on NSE & BSE


Tejas Networks IPO – Issue Information:

Issue Opens on: 14 June 2017
Issue Closes on: 16 June 2017
Issue Type: Book Built Issue IPO
Issue Size: 3,02,21,332 Equity Shares (at Upper Price Band)
Face Value: Rs 10 per Equity Share
Issue Price: Rs.250 – Rs.257 per Equity Share
Market Lot: 55 Shares
Listing At: NSE, BSE

Equity Shares outstanding prior to the Issue = 72,038,130 Equity Shares
Fresh Issue of 17,509,727 Equity Shares @upper price band = Rs.450.00 Crores
Offer for Sale of 12,711,605 Equity Shares @upper price band = Rs.326.69 Crores
Equity Shares outstanding after the Issue = 89,547,857 Equity Shares

Category-wise Break up:.
Anchor – 13,599,599 Shares = 349.51Crs
QIB – 9,066,400 Shares = 233.01Crs
NII – 4,533,200 Shares = 116.50Crs
RII – 3,022,133 Shares = 77.67Crs (Lot size: 55 = 54,948 Forms)

Total Issue – 30,221,332 Equity Shares = 776.69Crs.

Subscription required for 1X
RII = 54948 Forms
NII = 116.50 Crs

Interest cost @6%p.a. for 7days = 29.573paise for 1X


Financial Information (Basis of Valuation)

EPS for FY14-15 >>> Rs.(2.90) (Page #113 of RHP)
EPS for FY15-16 >>> Rs.4.36 (Page #113 of RHP)
EPS for FY16-17 >>> Rs.9.40 (Page #113 of RHP)

EPS for FY17-18 >>> Rs.15.00 (Market Estimate)


RoNW for FY14-15 >>> (5.39)% (Page #114 of RHP)
RoNW for FY15-16 >>> 8.05% (Page #114 of RHP)
RoNW for FY16-17 >>> 12.63% (Page #114 of RHP)

NAV as on March 31, 2017 was Rs.70.78 (Page #115 of RHP)

Peer Group (Page #115 of RHP): NONE

 
Tejas Networks IPO

(Page #46 of RHP)
As of April 30, 2017 we have filed 333 patent applications, with 203 filings in India, 89 filings in the United States and 6 filings in Europe, out of which 56 patents have been granted and we have also filed 35 patent applications under the Patent Cooperation Treaty.


(Page #47 of RHP)

FY 2014 – 2015
Revenue from Operations (Net) = Rs.3,868,26 Million
EBITDA = Rs.685.21 Million
Restated (Loss) for the Year = Rs.(178.66) Million

FY 2015 – 2016
Revenue from Operations (Net) = Rs.6,274,57 Million
EBITDA = Rs.1,130.46 Million
Restated Profit for the Year = Rs.290.05 Million

FY 2016 – 2017
Revenue from Operations (Net) = Rs.8,781.96 Million
EBITDA = Rs.1,742.29 Million
Restated Profit for the Year = Rs.632.22 Million

(Page #48 of RHP)
We believe that Government investment in the telecommunications infrastructure through projects such as the National Optical Fibre Network (“NOFN”), the National Knowledge Network (“NKN”) and Smart Cities, will provide us significant business growth opportunities. In addition, we stand to benefit from Government policies such as Make in India and the Preferential Market Access (“PMA”) Policy, which are targeted towards encouraging indigenous technology/product development and manufacturing.


Tejas Networks IPO
Market Estimates of oversubscription:

Category-wise:

1X QIB(net) = 233.01Crs – assuming applications of 8KCrs. = 35X oversubscription

1X NII = 116.50Crs – assuming applications of 13.50KCrs. = 116X oversubscription

1X RII = 54,948 Forms – assuming 5L forms. = 9.1X oversubscription (applic-wise)
i.e. average 6 shares per form


Tejas Networks IPO
GMP 40 – 41
Kostak (No Trades)

Tejas Networks IPO
GMP 40 – 41

I am going to take Contra Bet and apply this IPO. As i said earlier anything below 2000 MC is reasonably priced however market news the MC will be close to 2400 giving it a PE of 80 on 2016 NP. So why i am backing this IPO the answer is Gururaj Deshpande. So it will have fancy from Fiis and Diis.

It has many pending patent it one of few Indian based technology company with so many technology patent. Also the issue will get decent traction even if the GMP at present is zero plus only 10% is reserved for retail investor since the issue size is around 800 crs 80 crs will be reserved for retails so less then 60000 application. so allotment will be hard

SO I AM APPLYING THIS IPO ON THE ABOVE ANALYSIS

Do agree with you I think such information should be discussed.

Investor want to earned huge no matter it comes from primary or secondary. so dont become obstruction from earning of investor.

Its looks there are 4ipos.....tejas,eris,cdsl and gtpl.....i had a limited fund which ipo shold i go for and which ipo i can avoid kindly suggest somone.....

Apply for one lot in all, given everything will be oversubscribed I dont think anyone ll be allotted more than one lot in retails

HELLO ACCORDING TO ME YOU SHOULD GO FOR CDSL AND ERIS LIFE SCIENCE . IF YOU WANT TO EARN HANDSOME PROFIT THEN GO FOR THIS 2