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A consortium led by IT services giant Tata Consultancy Services (TCS) is almost set to walk home with a Rs 27,000 crore ($3.3 billion) deal to roll out the 4G network of Indian state-run telecom operator BSNL. The extended deadline deadline The Economic Times TCS set to submit lone bid for BSNL 4G rollout, deadline extended to November 18 Read more was 18 November, marking the culmination of a delayed delayed The Ken The telecoms gymnastics behind BSNL’s Make-in-India 4G push Read more  process that has seen many twists twists The Ken BSNL’s Rs 8,000 crore tender—Make for India, not Make in India Read more  and turns turns The Ken PMO stakes BSNL’s future on Tata and an aatmanirbhar 4G gamble Read more  over the past few years. 

The outcome, though, seems like a foregone conclusion as TCS is said to be the sole bidder. What’s more notable, however, is the big-league breakout for a lesser-known entity: Tejas Networks, a telecom equipment maker. 

As part of the consortium, Tejas Networks will provide the network gear for the 4G rollout. The previous watershed moment for 22-year-old Tejas Networks—which had already listed on the bourses in 2017—came in July 2021. That month, Tata Sons, the holding company of the Tata Group, acquired a majority stake in the firm.

The stock, already on a tear from its pandemic-induced lows, took off like a rocket on the acquisition reports. And it shot up, up, and away until October 2022, after which it let off some steam. 

Even so, the stock has rallied a ~2,000% since May 2020 lows—with much of the gains coming in after the Tatas stepped in. In contrast, the stock is up just about 150% since its public listing nearly five-and-a-half years ago. 

So far, so good. The market capitalisation of Tejas Networks already stands near Rs 10,000 crore ($1.2 billion).

Ironically, the stock’s dream run is not backed by the company’s financial performance yet. Tejas Networks’ revenue has been falling sharply after the 2019 fiscal. And from being a profitable entity, it turned into a loss-making one in the year ended March 2020. 

The weak financial performance during the last few quarters was due to a revenue shortfall that stemmed from the global [semiconductor] chip shortage, while we continued to make research and development (R&D) and other investments needed for our future growth,” says a Tejas Networks spokesperson in an emailed response.

AUTHOR

Anand Kalyanaraman

A certified Chartered Accountant, Anand chose to pack the power of numbers with words when he left a career of seven years in accounting, putting together MIS reports, and investment research to enter journalism. Before joining The Ken, Anand was Deputy Editor at The Hindu BusinessLine, a newspaper he worked at for 11 years.

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