Tejas network IPO: A
brief analysis
Tejas network IPO is opened from today to raise Rs 450 crore
via fresh issue. The price band of IPO is 250-257 per share.
Bengaluru based Tejas Networks supplies optical and data
networking products to telcos, internet service providers, utility and defense
companies in over 60 countries, with exports accounting for a third of its Rs.
880 crore topline.
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 bottom line.
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.
Interestingly, there is no identiable promoter in the company and 100% is
held by ‘public’ category shareholders.
Tejas Networks IPO is
steeply priced, in addition to a weak balance sheet.
Citing poor
fundamentals and expensive valuations, avoid this IPO.
Source: SP Tulsian
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