Tejas Networks is a Tata group-owned telecom and networking solution provider. The shares of the Tejas have witnessed a 45% decline in the last four months. The company’s stock reached its all-time high of INR 1,409 per share on 6 November 2024. Currently, Tejas is trading at around INR 769.00 per share. Vijay Kedia, a well-known investor in the industry, holds 23,00,000 shares (~1.3% stake) of Tejas Networks (reduced from 1.87% in September 2024). His total investment in the company amounts to INR 177.2 crore.
Stock Performance and Market Reaction
On 24 February shares of Tejas Networks closed with a 4% red reflecting the ongoing downturn in the telecom sector. However, Tejas Network saw a slight improvement on 25 February’s trading session, the stock is trading around INR 770 per share (~1.30% improvement).
Apart from this recovery, the continuous decline in the stock is alarming for investors. The stock has dropped over 22% while the BSE Telecommunication index declined only 8.46%. It clears the picture that Tejas Networks is underperforming.
When we look at the trading volume, it has also dropped dramatically. Only 1,305 shares were traded on 25 February, compared to a monthly average of 1.3 lakh shares per day.
Company Background and Growth Trajectory
Tejas Networks is a Bengluru-based company that provides data networking products to various organizations. The company caters to telecom operators, defence organizations, internet service providers and some government entities. The company has increased it global reach aggressively, currently, it is operating in 60 countries. In the R&D field, Tejas has 326 patent filings distributed across India, USA and Europe.
Tejas Networks made its stock market debut on 27 June 2017. The issue was a mix of fresh issue (~INR 450.00 crore) and an offer for sale (~INR 326.69 crore). On the listing day, Tejas IPO delivers a lukewarm return of 5.44% on the investment. However, the IPO turned into a multibagger soon and surged over 4,000% from its all-time low of INR 28.90 in 2020 to INR 1,485 in June 2024.
What’s Next for Tejas Networks?
The ongoing market correction is badly impacting the equity market. However, correction is good for fair price discovery. As many as 43 IPOs from the last year, are trading below their allotment price. Investors can accumulate shares of IPOs with good fundamentals.
The current decline in share price is also caused by short-term negative sentiments in the market. However, long-term investors, including prominent figures like Vijay Kedia invested in the company’s cost-efficient business model and potential growth in the telecom sector. Investors should do thorough research before investing.
For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.